Does the Dutch royal family pay tax? You might rightly be wondering about the financial situation of the royal family in the Netherlands.
Coming from one of the many (but not ubiquitous) republics in Europe, the Netherlands seems – as usual – to do things in its own way: while all the other nations were run by monarchies the Netherlands was a republic, and in modern times the Dutchies prefer (70% of them) to be a kingdom.
But how does this work in terms of taxes? Does the Royal family sit behind the computer every year around April to fill in their income tax return?
Do the royals pay taxes in the Netherlands?
Well this was a predictable answer, right?
Under the constitution, royal house members receiving a stipend are exempt from income tax over that stipend. They are also exempt from all personal taxes over assets and possessions that they use or need in the execution of their functions for the kingdom. The monarch and the heir-apparent are also exempt from inheritance tax on inheritances received from members of the royal house.
No taxes on:
- a part of the capital money (used to carry out their functions for the kingdom)
- cars and motorcycles with an AA license plate
- private capital
- VAT on groceries
Should the royals pay taxes in the Netherlands? Is the Dutch royal family expensive?
Very! In fact, being more expensive than the British royal family and costing four times as much as the Spanish one, they are the most expensive royal family in Europe, according to research by the University of Ghent (Belgians right? Always meddling!).
According to Business Insider, in 2017 the royal family cost the government budget (and Dutch taxpayers) 41.4 million euros. Along with expenses compensations (used to pay their employees), the King, the Queen and the Princess get “consitutional benefit”, that increases annually at the same rate as the salaries of gov’t officials.
What’s in it for the country? Well, as you can imagine a king can open doors that others cannot, and more than half of the surveyed companies in a study by Regioplan believed that they got economic benefits from taking part in trade missions. Another study by Tillburg University concluded that the monarchy stimulates the Dutch economy to grow about 1% per year, and the Royals add 4 to 5 billion euros to the Dutch economy per year.
Why don’t the royals pay taxes in the Netherlands? Was there ever a secret deal between the Royals and the government?
Over the years there have been many rumours about a secret agreement made between the royal family and the De Jong cabinet in the 70s. According to the report, since the establishment of a new financial system managing the Royals’ expenses in the early 70s, a deal would have been made to guarantee that the “losses” of replacing the old system with the new one would be compensated with some extra benefits, and this agreement would still be ongoing.
The report stirred quite a heated debate in the government a couple of years ago, and a committee was put in place to clarify the matter. However, the Van Baalen commission, after almost a year, reached the conclusion that no such a deal was ever made.
Is it the end of it?
Of course not. This has sparkled again a discussion about whether the Royals should pay taxes like everyone else – and in general about the whole monarchy concept.
What is the opinion of Prime Minister Rutte, you ask? Along the lines of “everything should stay as it is, cause changing the rules would be too complicated”.
Do you think the royals should pay taxes? Let us know in the comments!
Editor’s Note: this article was originally published on 4 December 2017, but was updated for your reading pleasure on 12 June 2020.
Feature image: Minister-President/Wikimedia Commons