Income Tax Return in the Netherlands: Frequently asked questions
Filing a tax return in the Netherlands can raise many questions, particularly if you have recently moved here or have income from abroad.
Together with our partner Tax In, here we provide answers to the most common questions from internationals about the Dutch income tax return, covering everything from the three-box system and applicable rates to deductions, the correct tax form, and recent changes to the 30% ruling. Whether you are filing taxes for the first time or looking to stay informed, this page offers a clear overview.
What is the Dutch income tax system?
The Dutch income tax system is divided into three categories: Box 1, Box 2, and Box 3. Each box applies to a different type of income or assets. This means your tax return depends not only on how much you earn, but also on the type of income you receive.
What is Box 1?
Box 1 includes income from work and home ownership. This covers salary, self-employment or freelance income, foreign income, alimony, and your residence home. For most taxpayers, this is the most relevant part of the tax return.
What is the Box 1 tax rates for 2025?
For 2025, the Box 1 rates are:
- 35.82% up to €38,441
- 37.48% from €38,441 to €76,817
- 49.50% above €76,817
The system is progressive, so only the income above each threshold is taxed at the higher rate.
What is Box 2?
Box 2 applies to income from a substantial interest, usually when you own at least 5% of the shares in a private limited company (BV) or a foreign company.
What are the Box 2 rates for 2025?
The rates are:
- 24.50% up to €67,804
- 31% above €67,804
What is Box 3?
Box 3 covers savings and investments, such as bank accounts, shares, dividends, crypto, and second homes. It also applies to assets outside the Netherlands if you are a Dutch tax resident. The tax-free allowance for 2025 is €57,684 per person, and the reference date is 1 January 2025.
What changed in Box 3?
Box 3 has become one of the most discussed areas of Dutch taxation. In recent years, taxes were often based on a fictitious return, which did not always reflect the taxpayer’s real results. The system is now moving toward a fairer approach based on actual return. This is especially important for savers and investors whose real income was lower than the assumed return. During the 2025- and 2026-income tax return, you can choose whether to use fictitious or actual return.
What expenses may be deductible?
Some common deductible expenses include:
- Mortgage interest for your main residence
- Certain home purchase costs
- Personal debts
- Medical expenses not covered by insurance
- Work-related travel costs
- Donations
Not every expense is deductible, so proper documents are essential.
Which tax form do I need?
This depends on your situation:
- P-Form: if you were a resident for the full year
- M-Form: if you immigrated to or emigrated from the Netherlands during the year
- C-Form: if you were a non-resident all year
- F-Form: for deceased persons
Usually, the 2025 income tax return is filed between March and April 2026, but this year, as an exception, the M form can be filed from 1 May to 1 July 2026.
What changed with the 30% ruling?
The 30% ruling has also changed. Employees who already benefited from this scheme before 1 January 2024 may still use the partial non-resident taxpayer status for the 2025 income tax return. However, for employees granted the ruling on, or after 1 January 2024, this option is no longer available in many cases. In addition, from 2027, the tax-free benefit will be replaced by a fixed rate of 27%.
When do I have to file?
If you receive an invitation letter, you must file your tax return by the deadline stated in the letter. If you do not receive one, you may still be required to file if you owe more than €58 in tax or if you are entitled to a refund of more than €19. In that case, you generally have up to five years to submit your return.
Your final tax result can be affected by your residency status, type of income, deductions, assets, and whether the 30% ruling applies. Understanding these basics helps avoid mistakes; for questions, contact Tax-In at www.tax-in.com or via e-mail: info@tax-in.com