Taxes as a Freelancer in the Netherlands

There are a lot of rules when it comes to filing taxes as a freelancer in the Netherlands. In the first two years that I lived in the Netherlands, I tried to do it all by myself, researching everything and trying to find the cheapest ways to do my taxes. DONT MAKE THIS MISTAKE. Taxes are complicated. There is a reason why people file taxes professionally, and there is a reason why it costs so much money to have someone help you do your taxes. If you take any of my advice, I hope it is this: HIRE A GOOD TAX ADVISOR FROM THE BEGINNING. This will set you up for success and limit your headaches in the future. It might even save you money by helping you plan out certain ways to get tax breaks.

For example, you must spend at least 1225 hours on your business per year, in order to get a big tax break here in the Netherlands. There are many rules like this in the Netherlands that you need to be aware of and plan for each year. The best way to plan for this is by having a tax professional who is always up to date with the rules and can help you with anything you need.

Thankfully, I found someone who specializes in helping people through BOTH Dutch and US taxes as they start a business for the first time. His name is Adam Hollar, and he has even been through DAFT himself. He handles taxes for many people on the DAFT Visa so this is nothing new to him. Hi is very professional and affordable, unlike many other tax professionals here who will charge you a ridiculous amount of money. He will help keep your business in line with all of the regulations here in the Netherlands and US right from the beginning. Send him email using the button below if you need someone to handle both your Dutch and US taxes!

Contact Adam Hollar

Income Tax

Taxes as a freelancer in the Netherlands can be confusing at first, but I hope this guide can help you along your journey.

The Netherlands’ income tax for a self-employed person is very advantageous, as long as you don’t make too much money. If you qualify for all of the self-employed deductions, you can make up to €29,800 in 2020 without paying ANY income tax.
(*According to Blueumbrella.nl)

If you want to explore how much income tax you will have to pay in the Netherlands, check out this Netherlands self-employed income tax calculator: Income Tax Calculator

One important thing to remember during the first year you have moved to the Netherlands to become a freelancer is that you do not file a traditional income tax return. You must instead file an M-form.

Filing an M-Form (Your 1st Year in NL)

Filing an M-Form in the Netherlands is very complicated and I would advise having a tax professional handle this for you. This form is used for people who have moved to the Netherlands during the tax year they are filing for. The form is only in Dutch, making it even more difficult to complete by yourself.

I used Tax & Service Solutions to complete and file my M-form. They charge €130 to do this for you. This is cheap, but of course, you get what you pay for. They were not super responsive to my questions, and I just felt like another number in their file.

Paying VAT as a Freelancer (BTW)

Stay on top of your VAT (BTW) taxes and keep records of this for at least 7 years. I have heard horror stories of the Dutch Tax authority going back many years to collect unpaid VAT and imposing fines. Make sure you have the documentation you need to prove what you have paid. If your VAT isn’t very complicated, you can easily handle it yourself with a little research.

UPDATE: I was doing something wrong on my VAT returns for the first two years. I didn’t realize this until I hired a tax advisor. I recommend you do the same to avoid any mistakes. (See my recommended tax advisor above)

Here is a good guide to follow on how to do your VAT taxes as a freelancer if your situation is relatively simple.

Note: You only need to pay VAT on goods or services that you are selling within the EU. For example, I perform online marketing services for clients from the US. I charge them in USD and they pay me to my US bank account. Since I work from the Netherlands, this is still Dutch income and I pay Dutch income tax on these earnings. I do NOT need to charge VAT on these services or pay any VAT tax.

Accounting Software

If you are looking for an automated software to help you send invoices and keep track of your VAT taxes, Moneybird is VERY helpful. You can send invoices directly to your clients and even connect Moneybird to your bank account to automatically keep track of your transactions. The monthly price of Moneybird varies, depending on how complex your business is and how many transactions you make. The best part is you can try it for free for 4 months before you pay anything. However, the software is in Dutch. If your Dutch is not good enough yet, you can still use Google Chrome and translate every page while using it. It may even help you learn Dutch faster 😉

Try Moneybird for FREE