Because freelancers are not our employees and we don't pay taxes on payouts, they must declare any income received via Solar Staff by themselves.
To carry on tax accounting in the Netherlands for your Solar Staff income, you need to:
The Netherlands taxes its residents on their worldwide income, while non-residents are taxed on income from sources in the Netherlands only.
To determine tax residence in the Netherlands, it is necessary to establish an individual's permanent place of residence. In case of a dispute, the Dutch tax courts will examine the individual's durable ties of personal (and, to a lesser extent, economic) nature with the Netherlands.
Under Dutch tax law, several criteria are used to determine the place of residence. The most important of them are as follows:
Where a permanent home (including leased property) is maintained
Where employment duties are performed
Where the individual's family resides
Where the individual is registered with the local authorities
Where bank accounts and other assets are maintained
The intended length of stay in the Netherlands
A foreign citizen is considered a tax resident of the Netherlands if:
As a married person, their family accompanies them to the Netherlands, or
As a single person, they stay in the Netherlands for more than one year
In the Netherlands, individuals are assigned a tax identification number (burgerservicenummer, BSN) required for the interaction with government authorities, including in the course of tax payment. The BSN consists of 9 digits in the format NNNN.NN.NNN. It is assigned to both Dutch citizens and foreign nationals upon issuance of identity documents, including a driver's license.
In the Netherlands, VAT payers are also assigned a VAT identification number (omzetbelastingnummer, BTW). It consists of 10 to 12 characters with an optional NL prefix. The BTW is issued by the Dutch Tax and Customs Administration (Belastingdienst) when registering a freelancer as engaged in entrepreneurial activity. Entrepreneurs in the Netherlands are assigned two identification numbers for VAT purposes:
BTW-ID: this number is used for interactions with clients, such as invoicing
ID for VAT payers (ob-nummer): this number is used for interactions with the Dutch Tax and Customs Administration (Belastingdienst)
Taxes and contributions payable by freelancers
Tax obligations in the Netherlands depend on the chosen tax status and/or fulfillment of certain conditions.
The country has the following tax status options for Solar Staff freelancers to choose from:
Read on for more details.
Self-employed professionals without employees (zelfstandige zonder personeel, ZZP'ers)
Freelancers who are not registered as sole proprietors in the Netherlands pay taxes as individuals paying taxes on income from other activities (inkomsten uit overig werk). Other activities include providing services online, receiving payments from foreign (non-Dutch) customers, and so on.
A freelancer qualifies as a ZZP'er if as part of their activities they:
Independently determine their work schedule
Perform work for other clients
Set their own payment rates
Are able to delegate or subcontract work
Work without direction or supervision
If you are unsure about your status, we recommend that you contact the Dutch Tax and Customs Administration (Belastingdienst) for clarification.
Self-employed professionals are required to pay the following taxes and contributions:
Income tax (inkomstenbelasting) on income from self-employment at a progressive rate depending on the amount of income earned (below are the rates effective in 2023):
Tax on excess, %
0 – 37,149
37,149 – 73,031
Eligible taxpayers may use tax benefits and deductions to reduce their taxable income. See a detailed list of benefits and deductions here.
Income tax returns and payment. Income tax returns in the Netherlands must be filed based on the information sent to each individual by the tax authorities online. Individuals who have received a tax return letter from the tax authorities are required to file an income tax return before May 1 of the year following the reporting year. After that, the tax authorities will send them the final calculation of tax liabilities within 3 years starting from January 1 of the year in which the return is filed (for example, the final calculation for the 2023 return will be provided before December 31, 2026). The tax is payable after the filing of the tax return (also based on a letter from the tax authorities). Freelancers have the option to request and receive a preliminary tax assessment during the year (learn more here). If a freelancer does not receive a tax return letter from the tax authorities, they may file the income tax return before July 14 of the year following the reporting year.
Useful links: instructions for filling out a tax return; instructions for correcting errors in a tax return; tips for checking whether you need to file a tax return; tips for getting an extension for filing a tax return; a tax calculator.
Mandatory social insurance contributions payable by self-employed professionals. Freelancers earning income from other activities are also required to pay the following contributions:
The national insurance contribution (zijn de premies volksverzekeringen) levied at a rate of 27.65%. However, it is only payable if the income does not exceed EUR 37,149 per year. So, the maximum contribution for 2023 would be EUR 10,272.
The health care insurance contribution (zorgverzekeringswet) amounting to 5.43% of income.
Mandatory social insurance contributions are payable based on the income tax returns filed, with the tax authorities sending the taxpayer an electronic letter specifying the amount of contributions due after receiving their tax return.
Since self-employed freelancers not registered as sole proprietors do not fall under the criteria set by the Dutch Tax and Customs Administration, they are not subject to being registered as value-added tax (omzetbelasting) payers.
Sole proprietors (eenmanszaak)
To operate as a sole proprietor, one needs to meet the requirements of the Dutch Chamber of Commerce (KVK / kamer van koophandel). The Dutch Tax and Customs Administration (Belastingdienst) also checks if one is a sole proprietor for VAT and income tax purposes (learn more here).
The main criteria set by the KVK to determine if a freelancer's activity qualifies as sole proprietorship are:
The freelancer supplies goods and/or services
The activity is not symbolic or gratis, that is, it brings economic benefits to the freelancer
The services are provided to third parties (not just to close relatives) and are competitive
The Dutch Tax and Customs Administration (Belastingdienst) uses its own criteria for determining whether a freelancer is a sole proprietor for tax purposes:
Planned investments of money and/or time to start or grow the business
Regularity of the freelancer's activities
Decision-making authority regarding the timing and manner of the service provision and delivery of goods
Having more than one client
If the above criteria are met in relation to the freelancer's activities, then they are eligible to register as a sole proprietor. Registration of sole proprietors is carried out by the KVK, and it is possible to initiate the process online. Separate registration of sole proprietors with the Dutch Tax and Customs Administration is not required, since the KVK transfers all relevant information to the tax authorities electronically, and the notice of registration specifying the type of activity as per the Standard Business Classification (Standaard Bedrijfsindeling) (learn more here) and the tax number is sent to the sole proprietor in approximately 10 business days.
Learn more about the registration process and see FAQs here.
Sole proprietors in the Netherlands can apply one of two tax systems:
Simplified tax system (called "Small Businesses Scheme", kleine ondernemersregeling, KOR).
The only difference between these two systems is that when applying KOR, the sole proprietor does not pay and is not able to deduct VAT.
General tax system
The general tax system applies to all types of activities without restrictions and is selected automatically when a sole proprietor is registered with the Dutch Tax and Customs Administration. It requires the payment of the following taxes and contributions:
Income tax (inkomstenbelasting) payable similarly to that payable by self-employed professionals. The requirements for filing income tax returns are also similar (learn more about tax returns filed by sole proprietors here). The only difference lies in the expenses that sole proprietors can deduct when calculating their income tax. Unlike self-employed professionals, sole proprietors are entitled to tax benefits and deductions only if certain conditions are met:
If they work at least 1,225 hours per year (or 800 hours in case of long-term occupational disability)
If they spend more than 50% of their work time working for their own company (i.e., working as a sole proprietor)
Learn more about the benefits and deductions available to sole proprietors here.
Mandatory social insurance requirements applicable to sole proprietors are similar to those applicable to self-employed professionals. In addition, the KVK recommends several types of insurance for newly established sole proprietorships, including business liability insurance, professional liability insurance, and disability insurance.
Value added tax / VAT (omzetbelasting) levied at the following rates: 0%, 9%, and 21% (learn more here). Certain services are exempt from VAT, such as the provision of banking and insurance services (see a more detailed list here). Sole proprietors are also eligible for various tax benefits under the VAT legislation.
VAT reporting and payment. The reporting period for VAT may be a month, quarter, or year. Once a sole proprietor is registered with the Dutch Tax and Customs Administration as a VAT payer, they will be sent a letter specifying the reporting period applicable to their activities. The sole proprietor may change their reporting period by sending a letter in free form to the tax authorities. However, to change the tax period to a calendar year, the following criteria must be met:
The amount of VAT payable for the year is below EUR 1,883 EUR
The sole proprietor is not engaged in the import of goods from non-EU countries and, accordingly, obtained no relevant permit
The amount of expenses related to the following operations does not exceed EUR 10,000 per year:
If all the above conditions are met, the sole proprietor may file tax returns annually.
The deadlines for filing VAT returns and paying VAT depend on the selected reporting period. Learn more about the deadlines for filing VAT returns and paying VAT here. If VAT tax returns are filed annually, the VAT due shall be paid before April 1 of the year following the reporting year. Learn more about VAT payments here. The filing deadlines for VAT tax returns to be submitted by foreign sole proprietors who provide services in the Netherlands, but are registered in a foreign jurisdiction, are different (learn more here).
Sole proprietors are required to file their VAT tax returns online using the services provided by tax authorities or commercial apps (learn more about the filing of VAT tax returns here).
Useful links: tips for filing the first VAT tax return as a sole proprietor.
Simplified tax system (Small Business Scheme, Kleine Ondernemersregeling)
The Small Business Scheme (KOR) can be used by sole proprietors whose annual turnover does not exceed EUR 20,000. Under this tax system, sole proprietors are exempt from paying VAT. However, it is important to note that they are also not eligible to deduct any VAT expenses. You can check the eligibility for applying this tax system here.
To apply this tax regime, freelancers are required to submit an application. Upon submission, they can expect to receive confirmation from the tax authorities within 6 weeks, indicating a successful transition to the new tax regime. Freelancers who opt for this regime shall maintain it for a minimum period of 3 years.
Sole proprietors shall report on income tax and mandatory social insurance contributions and make corresponding payments similarly to self-employed professionals.
Accounting requirements. Sole proprietors are not required to prepare financial statements. However, they must retain their business records for at least 7 years, including:
Cash flow records
Business contracts and correspondence
Time and attendance records
Travel / business trip records
Records may be kept either electronically and in hard copy.
The Dutch Tax and Customs Administration (Belastingdienst)
The Dutch public services portal (DigiD)
The Dutch Chamber of Commerce and Industry (KVK, kamer van koophandel).
Instructions to avoid false self-employment
General information for doing business in the Netherlands
A test to determine the appropriate business structure
An online tool for assessing labor relations
If you have any questions, get in touch via the chat in your Solar Staff account or email us at [email protected].