Financial Matters and Tax in the Netherlands

OPENING A BANK ACCOUNT

Opening Your Account
To manage your day-to-day finances, you will need a current account, called a privérekening. To open an account, you must visit the bank in person, bringing along proof of identification (passport or EU identity card) and of your Citizen Service Number (burgerservicenummer). Most banks also like to see some type of proof of a regular income (such as a pay slip). You can also send an online request to open a bank account. You will be sent a proposal which you can take with you to a bank, along with proof of identification, to finalize the opening of the account.

Bank Cards
When you open your account, you will be issued a bank card. The basic card, or bankpas, betaalpas or europas, is used for making cash withdrawals from cash dispensers and for paying for your store purchases using a pinautomaat. If you choose to have one – and we strongly recommend that you do, unless you want to have wads of cash in your wallet – you will receive notice in the mail that you can collect your card. You take this letter to the bank, along with proof of identity (passport or EU identity card) to pick it up. In most cases, you ‘activate’ during this same visit. You are issued a four-digit pincode which you use every time you use the cash dispenser or use your bank card to pay in stores – but you can change this number at the bank.

Major Banks in the Netherlands
ABN AMRO BANK: www.abnamro.nl or www.abnamro.com (international)
ING BANK: www.ing.nl or www.ingbank.com (international)
RABO BANK: www.rabobank.nl or www.rabobank.com (international)
SNS BANK: www.snsbank.nl

Chipknip
The chipknip allows you to make payments without using the pincode, and is an additional feature or your regular bank card. There is usually a machine next to the ATM-machine where you can add credit (laden) to your chipknip.

Credit Cards
In the Netherlands, the commercial banks mostly have an arrangement with the major credit card companies. The money you spend with your Dutch credit card will be deducted on a monthly basis from your account or you will receive an invoice from the credit card company.
Paying by credit card is less common in shops – especially smaller shops and supermarkets. Restaurants, hotels and department stores generally accept all major cards, however.

Electronic Banking
All Dutch banks offer Internet and electronic banking. Most banks also offer mobile banking, via your cell phone. Online payments, when ordering online, is also done using iDEAL (www.ideal.nl) or PayPal.
 

TAXES

Residents of the Netherlands are regarded as ‘resident taxpayers’; non-residents as ‘non-resident taxpayers’ – though they can request to be treated as resident taxpayers. And then there is a fourth option: if you are benefiting from the 30%-ruling, you can opt to be treated as a partial non-resident taxpayer.

Residents
Whether or not you are a resident is determined ‘according to the circumstances’, such as where you have your home, where your family lives, where you work, how long you are here, other personal ties.

Four Taxpayer Options
Resident taxpayers owe income tax on their entire, worldwide income, from a.o. business and employment, wherever it is earned.
Non-resident taxpayers only owe income tax on income from certain sources in the Netherlands. ‘Real’ non-residents can choose to be treated as resident taxpayers – for instance, to benefit from the available deductibles.
If you are benefitting from the 30%-ruling, you can opt to be chosen as a partial non-resident taxpayer. You then are a resident of the Netherlands for income (and deductibles) in box 1, but you are treated as a non-resident in boxes 2 and 3. This option gives you the best tax position you can have in the Netherlands.

Income Categories
Box 1: Income from work and home. The tax rates vary from 1.85% to 52%. Social security contributions (33% in total) are calculated over the first two tax brackets.
Box 2: Income from substantial shareholding if you own at least 5% of the shares in a Netherlands company (BV or NV). This is taxed at 25%.
Box 3: Taxable income from savings and investments. 30% is levied on 4% of the assets – after the deduction of debts and a personal allowance – the effective tax rate being 1.2%.

Fiscal Partners
Dutch law contains the option for two people who are not married to become ‘partners’ (spouses are automatically ‘partners’). The status of ‘partners’ allows you to allocate income or deductibles in such a way that you can reap the maximum benefit from them.

Double Taxation
The Netherlands has entered into tax treaties with many countries. In most of these treaties, income from employment in the Netherlands is tax-exempt in the Netherlands, provided certain conditions are met.

The 30%-Ruling
The 30%-ruling is a tax facility that allows your employer to pay you a tax-free allowance of up to 30% of your wage for so-called ‘extraterritorial expenses’, thus reducing the effective rate of wage tax. Extraterritorial expenses are expenses that you would not have incurred if you had not moved abroad.
To qualify for the 30%-ruling you must:
• be posted or recruited from abroad
• be on a Netherlands payroll: your (Dutch or non-Dutch) employer must deduct wage tax (and general insurance contributions, if applicable) from any wages paid out to you
• offer specific expertise/scarcity which is not or scarcely available on the Dutch labor market’
• file a joint request for its application together with your employer with the Tax Office within four months after the start of your employment for the ruling to apply from day one.
In principle, the ruling applies for a maximum period of ten years.

USEFUL REFERENCES

TAXES

National Tax Office
tel.: 0800 05 43 (freephone)
Central website: www.belastingdienst.nl
International Tax Office Heerlen: www.belastingdienst.nl/buitenland
Ministry of Finance: www.minfin.nl 

Taxation in the Netherlands
Published by the Ministry of Finance, this guide (in English) gives a good overview of taxation in the Netherlands.
Internet: www.minfin.nl
Tax and customs administration
Steenvoordelaan 370, 2284 EH Rijswijk
P.O. Box 3080, 2280 GB Rijswijk
Tel.: 070 372 49 05

VAT REFUND

Global Refund: www.globalrefund.com  
Premier Tax Free: www.premiertaxfree.com  
Vatfree: www.vatfree.nl  
 

More on these subjects can be found in The Holland Handbook 2011 - 2012