A–Z glossary of Dutch tax terms used across the calculators and guides, with links to related articles and official sources.

Dutch tax glossary

Short definitions of the terms that appear in Dutch contracts, payslips, and tax returns. Figures that can change by tax year are verified against primary sources and linked from each term page.

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  • 30% ruling — The 30% ruling is an expat scheme under which an eligible employer can reimburse up to 30% of remuneration tax-free when a valid decision applies.

A

  • AOW — AOW is the Dutch state pension. Tax and national-insurance rates can differ depending on whether you are below or above AOW age.

B

  • Belastingdienst — The Belastingdienst is the Dutch Tax Administration — the public body that collects taxes and publishes official rates, forms, and guidance.
  • Box 1 — Box 1 is the Dutch tax box for income from work and home ownership, including employment income and most self-employment profits.
  • Box 2 — Box 2 taxes income from a substantial interest in a company, typically when you own at least 5% of a company.
  • Box 3 — Box 3 is the Dutch wealth box that taxes a notional return on savings and investments above an exemption, using rules that can change by tax year.
  • BTW — BTW is Dutch value-added tax (VAT) charged on many goods and services; it is separate from Box 1 income tax on salary.

F

  • Fiscal partner — A fiscal partner is a person with whom you file or allocate certain Dutch tax items under partner rules, which can change how credits and Box 3 exemptions apply.

G

  • General tax credit — The general tax credit is an income-dependent credit that reduces Dutch income tax for residents who qualify under the rules for the tax year.
  • Gross annual package — A gross annual package is the yearly employment pay figure used for planning, often including or excluding 8% holiday allowance depending on the offer.

H

  • Holiday allowance — Holiday allowance is a statutory or contractual payment, commonly about 8% of salary, often paid in May or accrued monthly depending on the employer.

L

  • Labour credit — The labour credit is an income-dependent tax credit for people with income from work, reducing tax under the rules for the tax year.

M

  • M-form — The M-form (M-return) is the migration income-tax return used when you move to or from the Netherlands in a tax year.

N

  • National insurance contributions — National insurance contributions fund schemes such as AOW and are combined with income tax in the Box 1 bracket rates for people below AOW age.
  • Normal month vs annual ÷ 12 — A normal payslip month can differ from annual net income divided by 12 because of holiday allowance timing, bonuses, and withholding patterns.
  • Notional return — A notional return is an assumed yield the tax rules apply to wealth categories in Box 3, instead of measuring every actual gain for the provisional method.

P

  • Payroll tax credit — Payroll tax credit is the tax credit your employer or benefit provider can apply through payroll so less tax is withheld each month.
  • Primary residence — Your primary residence is the home treated as your main dwelling for Dutch tax rules, which can affect mortgage interest and related Box 1 items.

T

  • Taxable income — Taxable income is the income figure after the adjustments the tax rules require before brackets and credits are applied.

W

  • WOZ — WOZ is the municipal property valuation used for several Dutch tax and levy purposes, including some housing-related calculations.