Legal, Tax and Financial Matters

This chapter covers all of the legal and financial information you may need during your stay in the Netherlands such as money matters; where much of your hard-earned money goes (the tax man); obtaining permits; getting married in the Netherlands and its legal consequences; what to do when you want a divorce; the rules of inheritance; insurances you need to consider; where to go for legal assistance, and much more.

The Euro 
As of January of 2002, the monetary unit of the Netherlands – and for Austria, Belgium, Germany, Finland, France, Ireland, Italy, Luxembourg, Portugal and Spain – became the euro. In May of last year, ten new countries joined the EU, however, they do not automatically ‘acquire’ the euro; in order to do this they must meet certain economic criteria – which will be judged at some point in the future. Up till now, Slovenia, Cyprus, Malta and Slovakia have introduced the euro.

Making Payments
In the Netherlands, you can use the following ways to make payments: cash, bank card (also referred to as pinnen), credit card or chipknip/chippas, by cheque or having your bank make a transfer, or by using an acceptgiro (a payment authorization you usually receive in the mail, which you sign and send to your bank).
Keep in mind that you cannot use your credit card in the most surprising of places – such as when buying furniture. You do not have to carry wads of cash, however, as you can make use of your bank card.
If you are using the chipknip or chippas feature on your bank card, which requires no pincode, the machine merely checks whether there is enough money on the card and if there is, it deducts this amount immediately from the balance on your chipknip/chippas.

Automated Teller Machines
All banks and almost all post offices have ATMs, as well as do train stations and large shopping areas, for ‘taking money out of the wall’.

Taxes 
For the purpose of application of the tax laws, it is very important to know whether you are a resident of the Netherlands or not. There are four taxpayer options:
1. You can be a resident taxpayer. In that case, you owe income tax in the Netherlands on your entire, worldwide, income.
2. You can be a non-resident taxpayer. In that case, you are only liable to pay Dutch income tax on your income from certain sources in the Netherlands.
3. 'Real' non-resident taxpayers can choose to be treated as resident taxpayers for tax purposes.
4. You can choose to be treated as a partial non-resident taxpayer. This option is only open to those benefiting from the 30%-ruling.

Both resident and non-resident taxpayers run the risk of owing income tax in two countries and have to rely on treaties to protect their bank accounts.

The 30%-Ruling
 
The 30%-ruling is a tax facility for employees who have been posted or recruited outside the Netherlands to work for a ‘resident’ employer (not necessarily a Dutch company). The effect of the facility is that your employer can pay you a tax-free allowance of up to 30% of your wage for so-called extraterritorial expenses, as a result of which the effective rate of wage tax is reduced.

The Netherlands Tax System
 
There are three different categories of income, which are treated separately and differently from the other:
Box 1 is for income from work and home. Tax is calculated on the taxable income according to the progressive tax rates, which vary from 2.35% - 52%.
Box 2 is for income from substantial shareholding.
Box 3 is for income from savings and investments. The effective tax rate is 1.2%.

Permits 

If your stay in the Netherlands will not exceed three months, then most likely you will not need a visa to enter the Netherlands: a valid passport will be sufficient. Check with the Dutch embassy or consulate in your home country.

For stays longer than three months, you might need one of the following:
1. authorization temporary stay (machtiging tot voorlopig verblijf, MVV)
2. residence permit (verblijfsvergunning)
3. work permit (tewerkstellingsvergunning)

Special rules apply to EU, EEA and Swiss nationals.

Your employer applies for a work permit, you apply for a residence permit. This should be done simultaneously.
Special rules have been created for so-called Knowledge Workers - for more information, contact the Immigration and Naturalization Services (IND).

Students 

To be granted a residence permit for study purposes, students must follow a study with a recognized school or university (of professional education). It is not enough just to be taking Dutch language lessons. Non-EU/EEA/Swiss students also need a work permit to work here. Don't forget that, for tax purposes, you will need a Citizen Service Number’ before you can start working (explained in section Employment).

Matrimonial Property

The Dutch legal system determines that if you get married in the Netherlands, all property and debts that either of you had before the marriage, becomes joint property and debts once you are married. This can only be avoided by means of a (pre or post)nuptial contract.

Third parties, such as creditors, are not always bound by your matrimonial property regime: contact your lawyer and find out about registering your matrimonial property regime in the matrimonial property register to protect yourself.

Divorce 

In the Netherlands you can file a petition for a divorce before the District Court of the district in which you and/or your spouse lives. If both of you have Dutch nationality, or if one of you is Dutch and has been living here for six months or more, the Dutch courts are competent. If neither of you is Dutch, depending on your residence status, you might still be allowed to file for divorce here. We suggest that you contact a mediator / lawyer or even your municipality to find out what rights you have.

Taxes in the Case of Death
 
The entire estate of non-Dutch nationals who die while living in the Netherlands is (also) subject to taxation here. Even those who do not live in the Netherlands at the time of death may be subject to Dutch taxes: transfer tax. The criterion used for the tax is whether the goods had a strong connection to the Netherlands, such as immovable property.
Treaties may provide (some) relief from double taxation.

Insurance 

There are many types of insurance available in the Netherlands: accidents, legal aid, medical, etc.

Having good insurance for medical expenses is very important. As of January 1, 2006, all residents of the Netherlands are obligated to arrange their own health insurance. The division of insurances into the Ziekenfonds for those whose income lay below a certain level and private insurance for those whose income lay above this level no longer exists. To pay for the insurance, everyone pays a fixed contribution of approximately 1,150 Euros and an income-dependent contribution.
Issues that are of interest to look at when doing comparative shopping are: whether you can take out own risk, what the coverage is if you are abroad and fall ill or otherwise require medical care, level of dental care offered, alternative therapies, etc.

Legal Aid 

If you have legal problems or need legal advice, you can find this in various forms in the Netherlands. If your income is below a certain level, you can approach a 'Legal Counter' for initial, basic questions. If you then require the assistance of a lawyer, then subsidized legal aid is available through legal offices. The former 'Legal Aid Societies' are being phased out over the course of this and last year.
If you do not require subsidized aid, you can consult a lawyer, for whom there are no flat rates. Other sources of advice could be trade unions and social service counselors. 
 

For useful addresses and websites, please use the info-link button at the top of this page

More on these subjects can be found in The Holland Handbook 2010 - 2011