NETHERLANDS Law and Practice Contributed by: Friederike Henke, Ingrid Cools, Philip ter Burg, IJsbrand Uljée, Suzan van de Kam and Epke Spijkerman, BUREN
• profit-sharing or saving plans; • working hours or leave; and • salary or job classification systems.
In 2026, the applicable rates for non-retired persons are: • 35.75% for income up to and including EUR38,883 (8.10% excluding social security contributions levied from employees); • 37.56% for income ranging between EUR38,883 and EUR78,426; and • 49.50% for income exceeding EUR78,426. Box 2 is levied at a progressive rate on income. In 2026, the applicable rates are: • 24.50% for income up to and including EUR68,843; and • 31.00% for income exceeding EUR68,843. In 2026 box 3 income tax is levied at a rate of 36% on three categories based on a deemed return on assets minus liabilities. The deemed return for 2026 will be announced at the start of the year 2026, except for the “other assets” which is already known (deemed return: 6.00%). The effective rates applied in the preliminary 2026 per - sonal income tax assessments are as follows. • Bank balances (including savings) and cash: 0.4608% (flat rate of return of 1.28 * 36%). • Other assets: 2.16% (flat rate of return of 6,00 * 36%). • Debt: -/- 0.972% (flat rate of return of -/- 2.70 * 36%). In 2026, the first EUR59,357 (EUR118,714 for taxpay - ers with a tax partner) of net box 3 assets are tax- exempt. Subject to certain conditions, employees hired out - side the Netherlands can apply for a ruling allowing employers to pay 30% of the wage tax-free, including allowances. This scheme may be applied up to the maximum amount under the Standards for Remunera - tion Act (EUR262,000 in 2026). Furthermore, the 30% facility will be scaled back to 27% from 1 January 2027 onwards. The limitations
Furthermore, trade unions often represent their mem - bers in discussions about a collective labour agree - ment and in collective dismissals.
5. Tax Law 5.1 Taxes Applicable to Employees/ Employers Taxes Paid by Employees Personal income tax
Personal income tax is levied on Dutch tax residents (on income from various worldwide sources) and non- Dutch tax residents (on income from Dutch sources). Personal income tax is levied on three different cat - egories of income, referred to as “boxes”: • box 1 concerns income from work and home, and includes income from past and current employ - ment, sole proprietorship, and an owner occupied home; • box 2 concerns taxable income from, in short, (share) interests of 5% or more in companies; and • box 3 concerns income from savings and invest - ments. Wage tax is withheld by employers, and functions as a pre-tax to personal income tax (and employee social security contributions). Income from past and current employment (realised by Dutch and non-Dutch tax residents) is determined by the Dutch Wage Tax Act 1964. Except in certain specific cases (for instance, if the individual functions as a board member or supervi - sory board member of a Dutch company), individuals who work (almost) entirely outside the Netherlands are generally not considered “employees” for Dutch wage tax purposes. Personal income tax for box 1 is levied at progres - sive rates on income, minus personal deductions and allowances.
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