How much money do I have to set aside for income tax and when do I have to pay this?
How much income tax you have to pay (according to the tax authorities)
It is a question that is rightly asked more often. This is the answer the tax authorities give.
We cannot say that like 1-2-3 (a Dutch way of saying it isn't done fast). Among other things, it depends on how much income and capital you have. Because we have 4 tax brackets with different rates. It also depends on, for example, whether you have deductible costs or debts.
There are different types of income for income tax purposes. For your income from work and home (box 1), different tax rates apply than for your assets (box 3). And those rates can vary per year.
Tax rates for income from work and home (box 1)
These infographics are not translated in EN yet because the Belastingdienst doesn't do English :) But you will understand these universal numbers.
Income tax for entrepreneurs
This is the case if you are an entrepreneur for income tax purposes in the Netherlands. A number of factors play a role in this, including the level of your profit, the 1225 hour criterion, the number of clients, whether you publicize and promote your services, your independence and if an entrepreneurial risk applies to you.
Entrepreneurs pay taxes on the taxable profit made and therefore not on their income. This profit is the sum of all the income from your company minus the operating costs. These are all your business expenses. Taxable profit is after benefits are taken into account. If you are a client of The Bookie, then you always have an up-to-date overview of your finances, both income and expenses, in The Bookie Webapp. In the left bar under Overviews you will find your VAT overviews and Profit / loss account. This last overview shows what your Profit is.
Is your income a result from other activities (also income from other work or ROW in Dutch)? Then this does not apply to you. In this case you can still be an entrepreneur for VAT.
Income tax tool from The Bookie
Of course we understand that you want a bit more insight and don't want to leave you with such a vague story. That's why you can use The Bookie Income Tax Tool for an estimation of the amount of income tax that you will have to pay. Keep in mind though that this is a machine that doesn't take in to account your specifics and personal situation, therefore this is not definitive or binding. Read here how that works.
Income tax and Health Insurance contribution to be paid
At the start of a new bookyear or our new collaboration for income tax, you receive a request from us to provide additional information. After you have completely provided the additional information, you can expect a draft version of your annual reports within three months. Once you have approved this, we will submit your Income Tax return.
In addition to the income tax, bear in mind that you need topay an income-related healthcare insurance contribution (ZVW). If you're employed, this contribution is already withheld by the employer of the benefits agency, but as an entrepreneur you have to pay this contribution yourself.
You will usually receive the (provisional) overview from the Tax Authorities within 3 months. This states the payment period for your income tax and the zvw in a separate briefing.