Taxes in the Netherlands Explained

[@dpashutskii]

What else would you like to learn about finance-related topics in Europe/Netherlands?

[@fordtahoma]

Great video!

[@meos]

Great video man!

[@dpashutskii]

Thanks!

[@BlazeGuitarLessons]

I appreciate how in depth this video is and the examples. Also, I think a 22.7% tax rate plus the social security tax on $48,000 is super high. But I'm an American haha

[@mrr3alistic738]

It is not that high if you take into account what you get for it. Most of the healthcare is paid, your healthcare costs are only 150 euro a month with a 400 euro yearly deductible, but that covers almost everything you would really need. In addition, you get a minimum of 20 vacation days a year, paid parental leave (female 27 weeks, male 17 weeks), paid sick leave, a ton of employee protection, proper road infrastructure (both for cars, bicycles and walking), free high quality primary and secondary schools and pretty cheap high quality universities, and the list goes on and on. The higher taxes gets you a ton of good stuff back, so most people don't mind paying taxes that much here.

[@BlazeGuitarLessons]

@@mrr3alistic738 I get what you're saying but I'd still say it's really high. Those are some of the highest rates in the world. Keep in mind that half the US population pays zero in federal taxes and that our sales taxes are way lower. I only pay $190 a month for health insurance and it's really great. Plus, pretty much every professional job here gives you generous paid time off and maternity/paternity leave. Those things just aren't required by law. The other thing to consider is that you're paying for all those things whether you use them or not which seems unfair to the person making $48,000 a year who isn't exactly a millionaire. Your money also doesn't go as far in the Netherlands as it's not in the top 10 for purchasing power parity. Meaning your money doesn't get you as much. I do like the occupational licensure laws there better in general though.

[@dpashutskii]

It's 22.7%, including social security. Isn't American taxes pretty much the same or even higher if you count high-taxed states + federal? Of course, it doesn't make much sense to count for €48000, which is an okay-ish salary in the Netherlands but relatively low in the US. Maybe it makes sense to $70k as a comparison. Of course, in general, it isn't comparable because, in Europe, you pay for welfare A LOT. It is a fantastic place to live, but it costs money. I'd argue that the US is one of the best places to live if you're healthy, work in a high-paying industry, and want to make money.

[@dpashutskii]

The Netherlands is actually 11th in Purchasing Power Index 😅 For a European country, it's one of the best places.

[@BlazeGuitarLessons]

@@dpashutskii in the US, the bottom half of the population gets more back from the federal government than it pays. So the federal tax rate is better than paying nothing for them. State income taxes range from 0-13% but someone making $48000 would never be at the top rate of 13%. That high rate is only in a few states like New York and California. It's also worth noting that the US sales tax rate is never higher than 10% while it's usually around 5-7% depending on the state. So the tax rates for income and sales are dramatically lower in the US and it has the 2nd best purchasing power parity in the world. If I were to live in another country, and I have residency outside of the US, it would be hard for me to think the Netherlands is the place to go. I liked the video a lot. I just hate high taxes haha

[@vladm.6859]

very useful video! one discussing box 2 and box 3 would also be great. :)

[@dpashutskii]

Thanks for the feedback! Will make them too!

[@j.vanderson6239]

It’s a lot, but at least we see were it is spent on, therefore it’s ok for me !! Very informative video. Never thought that a Russian guy would teach me about my country’s own tax system hahahaha😊

[@dpashutskii]

Wow, haha. I am flattered!

[@viderethevaccinatorfromhol7536]

Excellent job. I never cared about paying my taxes. Most of it is well spent and beneficial to the majority of our people. I like our system.

[@dpashutskii]

I agree!

[@JKSVAM_]

Hey, I recently moved to the Netherlands to be with my partner. I watched some of your videos and it has really been helpful. Right now I’m struggling and want to get into investing in the Netherlands and also want to be successful like you. Is there anyway I could learn from you more? I’m still young but I do want to succesful in my future but I don’t know where to start 😅 do u have a class or discord or email where I can learn❤😊

[@dpashutskii]

I don't have anything right now sorry :) Only my videos so far. I'll announce if I launch something on this channel. What would be a number thing you would like to learn?

[@MrSaikathalder]

i just checked in India, I paid 27% only on income tax this year. and in netherlands, for 100k salary with 30% ruling the tax is 22%. now consider what you get in india vs what you get in netherlands.

[@dpashutskii]

That's why I always say to everyone that Dutch taxes are not so bad. With 30% ruling, it's one of the lowest in the western EU.

[@MrSaikathalder]

if some one gets 30% ruling, then the tax is very reasonable.

[@dpashutskii]

I might argue it's reasonable even without ruling but ruling is nice for sure.

[@ygk6289]

As an expat having lived here the last 13 years, i am too obviously happy in general about how our heavy taxes are used by the government. however, to put things in perspective, you have to accept, while the system is guranteeing less fortunate and needy to hae a descent and humanly life, it is also promoting people to stay or even maybe become that way. Because after all, you need to make a whole lot of money to have a better standard, to at the end to see that majority of your taxes go to shadey social support schemes, where people get them, and also do untaxed jobs in paralel. Most dutch blame outsiders and immigrants, but i have seen plenty of dutch do it too. Furtermore, I am not happy paying x12 (yes times twelve) health insurance than a Belgian, while a Belgian gets better health service too. I also withness how 30% ruling was retroperspectively and populistly lifted screwing many expats, who add value to country's economy, to whom the NL invested 0 euros for education, and who has to spend more money than average dutch. If you think this is an overstatement, send all high skill migrants tomorrow, and see what happens in 1 year. well, send low income migrants doing all the heavy lifting in sevice sector tomorrow, you will see shit hitting the fan in few months probably. Likewise, not happy paying more and more motor and road tax for my ice car, while the so called environmentally friendly cars getting a tax benefit only a couple of years or so. So, make up your mind, are you after sustainability, or are you after money? Lastly, there are rumours about taxing "unrealized profits" for box 3 (meaning you haven't cashed in the profit, but if you did, it is there). which will make investment more difficult) in combination with a emigration tax (so you need to do taxes anyother 5 years if you leave the NL to outside EU?). Now, these are rumours but if something resembling to this comes, let me tell you, it is not just a few expats who "try to" live in the NL, but the Dutch themselves will start fleeing the country. BTW, companies are already leaving the NL for continoulsy and annually changing policies, and lack of talent and staff that can work full time.

[@dpashutskii]

Well, that's their choice. I think becoming less fortunate on purpose and losing ambition is a waste of life. If they choose this life, it's their choice. I am okay paying for them in taxes, but it would be great to see the programs that get people out of these situations-not because of taxpayers' money but because these people need help. There is some truth to your words regarding how expats are substantial for the economy; it's also my observation. I hope the government won't screw up it too much. It would be very sad to lose that. Not because I am expat (I'll be fine) but because such a fantastic country will struggle for sure if they try to get rid of expats. It would have been a pity and a very stupid thing to do. Many countries before the Netherlands had already gone through the same issues, and it was never good to push migrants out. The "Unrealised profits" for box 3 are already taxed. The current discussion is about eliminating this system and imposing regular capital gain taxes, which is good. I seriously doubt that an emigration tax or exit tax will be imposed. Currently, it literally exists in 1 country in the world. Maybe 2 in some way. Companies are constantly leaving and coming. It's part of the game, so that's normal. Any country has its pros and cons for doing business, and the Netherlands is by far not the worst.

[@ygk6289]

@@dpashutskii they tax them but based on a assumption which in most cases is for the favor of the investor (though who don't invest, of course unfairly get taxed, which is why they are changing it). So, if they tax unrealized profits on investments in an extreme way, people will even need to cash in their investments just to pay taxes, which also mean investment too will not make much sense (next to working too hard on your white collar or blue collar job career would not due to heavy taxes on the higher portion of the salary). Hope this does not pan out that way but i would not be surprised if it does.