Are you a self-employed person (ZZP’er) in the Netherlands? First of all, congrats! Look at you being the CEO of your own business. Ok, now it’s time to be the boss and figure out how to pay taxes as a ZZP’er in the Netherlands.
As internationals in the Netherlands ourselves, we know that the prospect of navigating the world of taxes in Dutch and on your own can be terrifying — to put it lightly. Let’s run through everything you need to know to master that self-employed life. 💪
Who counts as self-employed (ZZP’er) in the Netherlands?
If you are self-employed in the Netherlands, then you are classed as a ZZP’er. What do we mean when we say ZZP’er? It’s simple: Zelfstandige Zonder Personeel which translates to “self-employed without personnel.”
In short, ZZP essentially means you have set up your own business and it’s a one-person team consisting of one star ‘employee’: you! ⭐️
Are you required to pay tax if you are self-employed in the Netherlands?
If you are a ZZP’er in the Netherlands, then not only are you going to have the responsibility of being the CEO, founder, and boss of yourself — you’re also responsible for paying your own taxes to the Dutch tax office, the Belastingdienst.
In the Netherlands, everyone pays their taxes using DigiD. However, if you do not have one, there are other options. All of this can be done through the website Mijn Belastingdienst Zakelijk.
READ MORE | The ultimate guide to setting up your DigiD in the Netherlands [2022]
What tax do you have to pay as a self-employed person in the Netherlands?
As a ZZP’er, you are not a separate legal entity from your business (in terms of taxes). This means you pay income tax and social security through your annual income tax return. However, you are also still a business, meaning that you must also pay BTW (VAT).
What is income tax in the Netherlands?
No surprises here! Income tax is the tax you pay on your annual income. You can be taxed anywhere between 37.07% and 49.50% depending on how much you earn.
Since you are not considered a separate legal entity from your business, your business profits will be considered part of your income.
Remember: While it may look like you’re CRUSHING IT and making that moolah, you need to remind yourself that the money you’re making is bruto or gross — a.k.a you still need to pay tax on it. Even though it is sitting in your bank account, the tax office still wants its share.
How much income tax you pay depends on your income. There are two potential rates that you may pay in 2022:
- If your income is below €69,399: you will pay 37.07%
- If your income is above €69,399: you will pay 37.07% on the income up to € 69,399 and 49.50% on the income in the excess of €69,399
If these rates are likely to put you out on the streets, don’t panic just yet. There are allowances for ZZP’ers who earn below a certain level and meet certain requirements (more below.) 😉
What is BTW (VAT) in the Netherlands?
BTW stands for Belasting over de Toegevoegde Waarde, or as we say in English, Value Added Tax (VAT)!
When you work as a ZZP’er, you charge BTW (VAT) to your customers on top of the cost of your services. Usually, you charge 21%, which means that you calculate 21% of the cost of your services and add it to your invoice.
READ MORE | Tax returns in the Netherlands in 2022: the expat basics
The extra 21% VAT is however not yours to keep. You will pay this VAT back to the Belastingdienst following the end of each tax quarter throughout the year. The VAT that you have already paid on the incoming invoices and receipts will be reduced from the VAT that you have to pay back to the Belastingdienst.
When are tax quarters in the Netherlands?
The Netherlands has four tax quarters. These are:
- 1st quarter: January 1 — March 31
- 2nd quarter: April 1 — June 30
- 3rd quarter: July 1 — September 30
- 4th quarter: October 1 —December 31
Before the end of the month following these quarters (i.e April 30 after the first quarter), you will have to file the VAT tax return to the Belastingdienst and pay the amount due. This can usually be done online through the Mijn Belastingdienst Zakelijk website.
Note: Depending on your situation, the VAT you charge may be different. For some services and products, a reduced rate of 9% or even 0% needs to be charged. A service or product can sometimes also be exempted from VAT.
Invoices to your customers abroad are also a bit tricky. VAT could be charged, but it is also possible that the VAT is reverse charged or out of scope. In these instances, it’s best to speak with a tax professional so you don’t make a tax faux pas.
What tax benefits can I get as a self-employed person in the Netherlands?
It may sound scary, but the Dutch tax system also has many tax benefits to help lessen the blow of taxes for ZZP’ers. These are:
Zelfstandigenaftrek — The self-employed deduction
If you’re self-employed and meet the conditions below you are eligible for a hefty tax deduction.
If eligible, the profit on which you are taxable will be reduced by €6,310 for the year 2022. This means that if you have made a profit of, for example, €19,000, you will only be taxed on €12,690 of that profit.
Note: In 2022, the maximum rate for deduction is 40%.
What are the requirements?
- You must be seen as an entrepreneur by the tax authorities.
- You must meet the hour criterion, i.e. you’ve worked at least 1,225 hours during the calendar year.
- You must be running the company.
- You have not reached the state pension age. If you have reached the pension age, the self-employed deduction will be reduced to 50%.
Startersaftrek — Starters deduction
If you are self-employed AND are considered a starter, then you may also be eligible for the startersaftrek. This is a further deduction of €2,123, meaning that the profit on which you can be taxed will be reduced again.
If we take the above example, this would mean that you would only be taxable on €10,567 of your profits.
What are the requirements?
- You must be seen as an entrepreneur by the tax authorities.
- You meet the hour criterion, i.e. you’ve worked at least 1,225 hours during the calendar year.
- You have not reached the state pension age. If you have reached the pension age, the starters deduction will be reduced to 50%.
- You have only been a starter for one year in the past five years.
- You have not used the startersaftrek already for the maximum amount of two times during this period.
MKB-winstvrijstelling (Small and Medium-sized Enterprise Profit Exemption)
You can think of the profit exemption as a supplement to the above two tax benefits. If you are eligible for the profit exemption, then you may reduce your taxable profit of 2021 by a further 14%. Again, this deduction will be limited to a maximum rate of 40% of your revenue.
What are the requirements?
You only must be seen as an entrepreneur by the Tax authorities.
Kleineondernemersregeling (KOR)
As of 2020, those who receive the KOR benefit will be exempt from paying VAT. This is only the case, however if your turnover remains below €20,000.
This means that if you earn under €20,000, you do not charge VAT and you do not have to file a VAT return.
What are the requirements?
- You earn less than €20,000.
- You have to register for the KOR via a registration form.
What is private and what is business?
As a self-employed person, your personal life and business life are seen as the same thing. This can lead to difficulties sometimes.
Business expenses
Business expenses are considered deductible depending on how they contribute to your business.
For example, if you bought a certain software system for your business, the costs of this software system can be deducted from your income as business expenses. If you also use this software system for personal matters, it becomes debatable whether the full price can be considered as business costs.
In general, most business expenses are deductible, but some are only partially deductible, some expenses are deductible over multiple years, and some aren’t deductible at all. It’s best to consult an accountant to determine which category your expenses fall under.
Dutch Health Insurance Act Contribution
As an employee, your employer pays the Dutch Health Insurance Act Contribution in the salary administration as a percentage of your salary. As a ZZP’er, you do not have an employer nor a salary administration. This means you will now need to pay this contribution by yourself.
How can you do that? Simple! Just file a Dutch income tax return and the Dutch tax authorities will automatically levy a Dutch Health Insurance Act assessment over the amount of income you had. Be prepared and set some money aside to pay this contribution.
Liability and insurances
As explained above, as a ZZP’er, your business and your personal money and expenses are not separated from each other. This also has implications for your liability. As a ZZP’er, you work at your own expense and risk.
This risk will extend to your personal money if you’re not able to fulfil your business obligations. You are liable for the debts of your business with your entire private assets. Some insurances could help you to cover your liabilities.
Assistance with BTW and the annual income tax return process
When it comes to paying taxes, many self-employed people enlist the help of either accounting software or an actual accountant. This can be quite a tricky process — especially when done in Dutch.
Preparing a balance sheet and profit and loss statement
One important element of paying your income tax as a self-employed person is preparing a balance sheet and a profit and loss statement.
- Balance sheet — this is an overview of your assets, costs, and equity. It basically indicates how your company is doing financially.
- Profit and loss statement — This is an overview of your turnover and your costs and indicates whether you have made a profit or a loss.
Both of these can be prepared for you by an accountant.
Whew! That’s the world of tax for a self-employed person in the Netherlands. Time to take on the challenge! 🏁
Ready to take on the world of taxes? We know you are. Tell us about your experience in the comments below!
Editor’s Note: This article was originally written in October 2021 and was fully updated in March 2022 for your reading pleasure.
Simplified explanation and fun read.
Thanks Sarah!
I am a zzp or freelancer I want to fill my tax but all I see there is like things I traded exports and import but I only work with restaurants…please I need help can you help me fill my tax
Were you able to file your tax? I need to do it formyself this year. Can you help me please?