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Opening a Bank Account & Managing Your Taxes in the Netherlands

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  • Pascal Tremblay

    With InterNations as my network, I have been able to make many friends learn the ins and outs about living in The Hague.

When it comes to tax system and banks, it is important to note that non-residents are not allowed to open a bank account in the Netherlands. However, as most expats need to register in the country and legally become residents, they should not have any problems with the bank system.

The tax system, however, can be a little more demanding. Firstly, taxes here are high. The highest tax bracket is around 50%. Then, the system is also quite complicated. The income tax is divided into different boxes depending on the type of income and each of them is taxed accordingly.

However, the good thing about the tax system is a specific tax ruling that favors expat professionals. They are relieved from some of the tax burden for the first five years when staying in the country.

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How to Open a Bank Account in the Netherlands

For those wondering how to open a bank account in the Netherlands for non-residents, you might be disappointed. If you are a non-resident or you fail to provide the records your bank requires, you will not be eligible for a Dutch bank account. Otherwise, as long as you have the necessary documents at hand, it is quite easy.

Can You Open a Bank Account in the Netherlands?

Yes, once you get your residency in the Netherlands sorted, you can open your bank account here. However, as you need your citizen service number (BSN) when registering for a bank account, non-residents cannot open a bank account in the Netherlands.

Setting up a Dutch Bank Account

The two most common types of accounts are:

  • current (also called payment or checking) account
  • savings account

You can also choose whether to open a single or joint account. Youth accounts (for people aged 12–25) are also available.

When setting up a current account, you will be offered a debit card, often referred to as a PIN card. These are more popular in the Netherlands compared to credit cards. If you do wish to have a credit card, supermarkets might not accept your payment.

Once you choose the account and the bank that suits your needs best, all you need to do is gather the required documents to get it all set up. If you are experiencing trouble with opening a bank account in the Netherlands, contact our local experts for professional advice.

Bank Fees and Deposits

Most banks will require you to pay a monthly fee for your account’s administration. The fee can be around 1.50–5 EUR (1.60–5.50 USD), depending on the type of account you choose. The only exception for this rule seems to be for no-fee youth bank accounts in the Netherlands. Administration fees for bank accounts with credit cards, multiple currencies, and travel flexibility are often more expensive.

Note that, typically, there are no minimum deposit or income requirements when opening a bank account. Also, some checking accounts even offer monthly interest.

Required Documents to Open a Bank Account

As an expat that wants to reside in the country (are not non-residents), you should have no problems getting a Dutch bank account. Typically, you need the following documents:

  • proof of ID (passport or ID card)
  • citizen service number
  • proof of address (tenancy agreement, utility bill, etc.)

Some banks can also ask for an employment contract, Dutch phone number, credit balance from your previous bank, or your residence permit. In most cases, you need to provide the originals of the documents.

Top Banks in the Netherlands

  • ING
  • Rabobank
  • SNS Bank
  • ASN Bank

ING is a very popular international bank that has a significant presence around Europe and in some Asian countries.

International Banks Available in the Netherlands

  • Deutsche Bank
  • The Royal Bank of Scotland
  • HSBC
  • Lloyds Bank
  • Credit Europe Bank

Best Online-Only Banks Available in the Netherlands

  • Revolut
  • N26
  • bunq

Can You Open a Dutch Bank Account Online as a Non-Resident?

Opening a bank account without showing up at the bank in person is only possible for EU citizens. When registering, they need to provide proof of identity that confirms their nationality. Third-country nationals need to go to the bank to open an account there.

What Is the Tax System in the Netherlands?

For those wondering what the tax system in the Netherlands is, know that taxes are quite high. Even the lowest tax bracket is over 35%. Luckily, expats can benefit from a specific tax ruling that allows them to receive extra non-taxable income.

The Tax System in the Netherlands

Living and working in the Netherlands requires you to pay taxes. The country has quite a few tax laws in place but the most relevant to the majority of people residing here is income tax. If you are in the country as an employee, your taxes will be withheld from your salary (payroll taxes). Self-employed individuals need to pay their taxes when filing the annual tax return.

Whether or not you need to file an annual tax return is the government’s decision. If you do, you will receive a letter or email in January informing you of your obligations. Once you get it, be sure to contact our team of local professionals that will help you understand the complicated Dutch tax system.

The Dutch tax year is equivalent to a calendar year. The tax returns should be filed between 1 March and 30 April.

Types of Taxes in the Netherlands

The value added tax (_belasting toegevoegde waarde_or BTW in Dutch) in the Netherlands is 21% or 9%. The lower tariff (9%) is added on:

  • food and drink
  • agricultural products and services
  • medicines
  • books (hard copies and e-format)
  • daily newspapers and magazines (hard copies and e-format)

Goods and Services Tax

All other goods and services are taxed at 21%, but there are some exemptions. For example, services like education, childcare, healthcare, sport organizations and clubs, financial and insurance services, and services supplied by writers, journalists, and composers do not require VAT payments. The other exemption applies when foreigners work with established Dutch entrepreneurs.

Property Tax

Additionally, people that own real estate need to pay property tax to their local municipality. Owners of cars and boats need to pay road and boating tax, respectively. If you inherit a large sum of money, you need to pay inheritance tax. The same rule applies if you receive a gift that exceeds the exempt amount.

Dog Tax

Another type of tax that might seem a little more unusual is dog tax. Dog owners are annually taxed for their furry friends. Each municipality has their own set amount that ranges from around 70 to 120 EUR (77–130 USD) per year. Some cities and municipalities (such as Amsterdam) do not impose this tax anymore.

What Is the Income Tax in the Netherlands?

The Dutch income taxes can be quite complicated to understand. The ways of obtaining income are divided into three boxes:

  • Box 1 – income on wages and property
  • Box 2 – income from substantial business interest
  • Box 3 – income from savings and investments

The first box is the most important one as every employee’s or self-employed individual’s income falls into this category. All the foreign income and social benefits also belong in the first box, as well as private business profits. The tax brackets for this box are quoted below.

Box 2 taxes substantial shareholders that own over 5% of shares. The tax is 25% (increases to 26.9% in 2021) for all related income. Tax for Box 3 is at 30% and applies to profit from savings and property that is not the primary residence.

Tax Deductions

The taxable income in the Netherlands is your gross salary minus deductions. Some of the Box 1 deductions are:

  • costs for home ownership
  • specific medical expenses
  • alimony and other maintenance obligations
  • educational tuition fees and other study costs

Tax Brackets

Tax brackets in the Netherlands are in a transitional period at the moment. The government wants to introduce a two-bracket system in 2020 that will replace the current structure. Now, the tax brackets are as follows:

Income (EUR) Income (USD) Tax (%) <20,384 <22,510 36.65 20,385–68,507 22,510–75,650 38.10 >68,508 >75,650 51.75

Starting from the 2020 tax year, people that earn below 68,507 EUR (75,650 USD) will be taxed at the 37.5% rate. Those who earn more than that will fall into the 49.5% bracket.

Note that the current tax bracket is in effect when filing your 2019 taxes (in 2020). You need to follow the dual tax bracket system when submitting your tax return for 2020 (in 2021).

Tax Credits

Tax credits are discounts on tax contributions. They are determined according to your annual income. If you are eligible for them, this is how they are calculated:

Your calculated payable tax – Tax credits = Tax you need to pay

The maximum tax credit sum is altered annually. There are two types of tax credits:

  • general (applies to all)
  • labor (applies to workers)

Note that tax credits can add up.

The 30% Ruling

This tax exemption benefits expat professionals that move to the Netherlands. For the first five years of living in the country, the government allows foreign workers to pay lower taxes. This exemption is made to compensate for expenses made when transitioning from one country to another.

The 30% stands for 30% non-taxable income, which means that 30% of your gross salary will not be taxed. The remaining 70% falls into the respective income tax brackets. Additionally, this exempts expats from paying Box 2 and Box 3 taxes (except for shareholding and real estate tax). Furthermore, your employer should grant you a non-taxable allowance that fully pays for your child’s international schooling.

To qualify for this ruling, expats need to meet salary and/or educational requirements. Still, most foreign workers are eligible for this benefit.

Taxes for Self-Employed People in the Netherlands

Most self-employed entrepreneurs and freelancers need to pay the same income tax that employees have withheld from their salary. However, they must do it themselves when filing their annual tax return. Additionally, they need to pay a health insurance premium contribution.

Depending on what they do, freelancers and self-employed workers also need to pay VAT. This applies to most businesses, except for a few above-mentioned services (healthcare, childcare, etc.).

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