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Taxation of Sole Traders in Netherlands

Taxation of Sole Traders in Netherlands

sole trader in Netherlands can be established by entrepreneurs who intend to be self-employed. In the Dutch state the sole trader is called ZZP-er, which represents the most common and simple business type in this country both in terms of registration procedure and taxation obligations. You can call on our Dutch accountants to explain you what regulations apply in the taxation of your profits in case you intend to open a sole trader in the Netherlands.

Tax rules for sole traders in Netherlands

The business profit is taxed in Netherlands in the same way as employment earnings. However as a sole trader you have several advantages. Not all of the gross business profit is considered taxable profit.

When a sole trader is established, the Dutch Chamber of Commerce (Kamer van Koophandel or KvK) will automatically notify the Tax Office in order to issue a VAT number for your enterprise. You will receive as well access to the online platform, through a username and password that you can use in order to submit the tax returns. One of our accountants in Netherlands can help you with the tax filings so that you can have enough time for your business activities which require your attention.

Taxes and tax rates for sole-traders in the Netherlands

As a sole trader in Netherlands you will have to pay the income tax inkomstenbelasting. The rates for this tax vary according to the income category in which your business enters. The profits obtained through your enterprise will be part of the Box 1 – (belastbaar inkomen uit werk en woning) which includes taxable income from employment and home-ownership.

In the Netherlands you are entitled to a great deal of tax benefits as an owner of sole trader.  The allowances (ondernemersaftrek) include tax relief for start-ups and a 14% tax relief, offered to investors in small scale businesses.

Feel free to contact our Dutch accountants who can help you with more detailed information on the taxation rules for sole traders in the Netherlands and who can keep you updated as well on the modifications in the tax rates of this country.