Netherlands Expat Guide
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Table of Contents
Introduction
The Netherlands tends to be the fifth happiest country in the world. This isn’t what I say. In fact, worldpopulationreview.com has stated the same with statistics.
It is also among the desired destinations for working abroad according to many sources.
The Netherlands is popularly known for its quality of education and work-life balance. Compared to many other countries, the work hours in the Netherlands are fewer.
Some expats say they had trouble with the living costs and the settling process.
Most people living in the Netherlands are able to speak English in a fluent manner. This makes it easy for the people to cope with the Dutch while living there.
Adding to that, the Dutch people happen to be friendly and welcoming.
Today, we are here to provide a detailed guide for expats in the Netherlands. We will shed some light on the following topics related to the Netherlands:
— Fun Facts
— Currency
— Banking
— Taxes
— Salaries
— Insurance
This means we will mostly cover the financially related aspects in the Netherlands.
We will have another article as an expat guide for the Netherlands, in which we’ll discuss:
— Education
— Crime Rate
— Cost of Living
— Visa
— Retirement
Now, let’s dive into our topic for today, which is “Netherlands Expat Guide”.
Fun Facts
Let us start by discussing a few fun facts about the Netherlands. Given below are a few facts about the Netherlands, which may amuse you.
• The Netherlands is the world’s tallest nation with a male average height of 6 feet and a female average height of 5.7 feet.
• The Netherlands tends to be the biggest flower exporter in the world. It is also called the Flower Shop of the world because of that.
• Amsterdam is said to have more than 1,200 bridges.
• Home births are still widely popular in the Netherlands. More than 30% of the deliveries in the Netherlands are home births.
• The Netherlands is said to have the highest number of bicycle owners compared to any other country. Around 18 million bicycles with 15,000 km of bike lanes.
• They have the biggest pub in Europe and they invented gin.
• The oldest national anthem in the world is the Dutch national anthem.
• Amsterdam, the densely populated city in the Netherlands, consists of 200 different nationalities.
• Dutch people are said to consume more than 32 million kilos of liquorice each year.
• The entire city of Amsterdam is built on wooden poles around 11 meters deep.
Having heard about a few fun facts, let us discuss the currency in the Netherlands.
Currency
Just like most other countries in Europe, the currency in the Netherlands is the Euro. Euro has been the official currency of the Netherlands since 2002.
You can see 8 types of coins in the Netherlands, which are as follows:
— 1 cent
— 2 cents
— 5 cents
— 10 cents
— 20 cents
— 50 cents
— 1 Euro
— 2 Euros
On the other hand, you can come across banknotes in the following denominations.
— 5 Euros
— 10 Euros
— 20 Euros
— 50 Euros
— 100 Euros
— 200 Euros
— 500 Euros
Even though it exists, not many places are likely to accept the 500 Euros bank note.
In some places, it might be hard to change 100 Euros or 200 Euros notes as well. 50 Euros is rather a convenient bank note for purchases anywhere.
Banking
Banking is one of the major aspects in a person’s life to cope with their finances. As an expat, it is very important to have a bank account that caters to your needs.
A bank account is necessary for expats to receive salaries, pay rent, or purchase anything.
While opening a Dutch bank account, you must make sure that it suits your needs.
You can even open an offshore account and several Dutch banks offer these services.
Most Dutch bank accounts have a yearly fee, which is also to be taken into consideration.
The biggest banks in the Netherlands are as follows:
— ABN AMRO
— Rabobank
— ING
— SNS Bank
— ANS Bank
— Triodos
Some of the digital banks operating in the Netherlands are:
— Bunq
— Revolut
— Knab
Opening an account
To open a Dutch bank account, there are two ways to proceed. The first one is where you make an online appointment with the chosen bank.
The second method is where you directly walk into a bank with the necessary documentation.
The general documents required for opening a bank account in the Netherlands are given below:
• Your BSN number, which is short for Burgerservicenummer.
• A valid ID proof can either be a passport or an ID card. In most cases, Dutch banks do not accept driver’s licenses as valid ID proof.
• A valid address proof. A rental contract should suffice.
• Residency permit. This is for people who are outside of the EU and want to open a Dutch bank account.
After submitting the necessary documents, your details will be processed. You will have to wait until your account gets approved and your pinpas get delivered to you.
Business bank account
The process of opening a business account is pretty much the same as it is for an individual account.
Apart from the documents mentioned above, you might be asked to submit business details.
Some of the business details required are your KvK number and statements of your turnover.
A KvK number is something that officially recognizes that you have a business in the Netherlands.
Internet Banking
Both residents and expats are allowed to handle their financial matters through internet banking.
Internet banking in the Netherlands is secure, and easy and handles all types of transactions.
You should remember that some banks in the Netherlands only support Dutch. You should do some research on whether or not the bank offers services in English.
Nevertheless, you will be provided with a tutorial from your bank while opening an account. Alternatively, you can learn Dutch. It’s said to be easy.
You will need an e.dentifier for accessing services related to internet banking.
An e.dentifier is a card reader that allows you to log in or make transactions.
When you request internet banking, you will get your own e.dentifier after account verification.
To get extended security, banks use your phone number to send codes. You can avail of internet banking in the Netherlands with the help of a smartphone as well.
ATMs
You can find ATMs in bank branches, shopping malls, supermarkets, etc. You can find ATMs through ATM locators offered by various national and regional banks.
Finding an ATM in a rural area might become a bit hard, so keep the cash. Bank branches are ideal for an ATM as independent ATMs charge more.
Wise (formerly TransferWise) has some extensive information on ATMs in the Netherlands. Click here to know about ATM-related information in the Netherlands.
iDeal
There is another popular method of making payments, which is called iDeal. iDeal uses your debit card, e.dentifier, and your pin-code for making purchases.
The common method of lending in the Netherlands is via loans provided by banks. If you need to borrow a smaller amount, then you can opt for a credit card.
The amount that can be lent to you depends on age, assets, income, and residency status. You can also walk into your bank and talk to an executive about the loan you want.
Because of iDeal, credit transactions are not too popular in the Netherlands. If you want a credit card from your Dutch bank, you can still get one.
Credit Cards
Credit cards are offered by many Dutch banks based on your minimum net monthly income.
The minimum income requirements differ from bank to bank. Credit card repayment in the Netherlands is usually done via direct debit from your account. Of course, monthly.
People who delay their credit card repayments are supposed to pay a higher interest rate.
You can even get a credit card from an international provider such as American Express. To compare the credit cards in the Netherlands, click here.
SEPA and IBAN
SEPA (Single Euro Payments Area) was brought into effect on February 1, 2014. As per this, there are no differences between cross-border and domestic payments.
Therefore, either you or your business can IBAN instead of a usual bank account.
IBAN is the International Bank Account Number offering identity financial identity worldwide.
Money Transfers
Sending and receiving money in the Netherlands has been made easy. This is done mostly through online banking and the Netherlands is efficient in that.
To have in-depth information on money transfers while living in the Netherlands, click here.
To know more about the banking system in the Netherlands, click on the links below.
Everything You Need To Know About The Netherlands Banking System 2022
Top 8 Banks for Expats in the Netherlands
Taxes
Tax residency status in the Netherlands is determined based on the following aspects.
• Location of a permanent home.
• Location of employment.
• Location of residence of an individual’s family.
• Location of the individual’s registration with local authorities.
• Length of stay in the Netherlands.
Coming to expats, an expat is considered a tax resident under the following circumstances.
• A single person who is staying or intends to stay in the Netherlands for more than a year.
• A married person who is accompanied by their family to the Netherlands.
Qualifying non-resident taxpayers are offered deductions and tax benefits.
People having partial non-resident status are also provided with deductions and tax credits.
To know more about these two types of tax residency statuses, click here.
There are no local taxes on income in the Netherlands.
Worldwide income is categorized into three types of taxable income. Each income type is referred to as a “Box” and has its schedule.
Based on the aggregate income in these boxes, an individual’s taxable income is determined.
Box 1
This box includes the income derived from the following sources.
• Employment income.
• Home ownership of primary residence (deemed income).
• Periodic receipts and payments.
• Benefits from income provisions.
The tax rates under this box are 9.42%, 37.07% and 49.50% based on the margin. In the first bracket of the margin, a national insurance tax rate of 27.65% is applied.
Box 2
The box includes the income derived from a substantial interest. Under this box, income is taxed at a flat rate of 26.9%.
A proposal is under way, which has adjusted tax rates for this box in 2024. There will be a basic rate of 26% on the first €67,000 per person. The amount exceeding €67,000 will be taxed at a rate of 29.5%.
Box 3
This box includes the income derived from savings and investments. Under this box, a flat rate of 31% is applied.
National Insurance Tax
In the Netherlands, there are contributions levied upon income. This is applied at a maximum amount of €35,472. This is capped at an amount of €9,808 every year.
Even from this amount, you can opt for various types of rebates that can be deducted.
In the Netherlands, the contributions made by an employee can’t be deducted. What I mean is that they can’t be deducted from the taxable income.
All these contributions and income taxes are collected as a single tax. This is collected from the first income tax bracket.
Employee insurance contribution
Based on the employee insurance regulations, tax is collected up to a maximum of €59,706.
The contributions depend on the specific industry in which the employee works.
The average contributions from the employer are up to €7,027. This is for the employees who have a permanent employment contract.
For the employees with a temporary employment contract, the amount is €10,012.
Dutch Health Insurance Act
the resident people and employees subject to wage tax are included in the Dutch Health Insurance Act.
Such people are required to process say statutory health insurance policies. The contributions regarding employees are as follows.
• Health insurance companies require a nominal contribution of around €1,522.
• Employers are required to pay income-related contributions. this is up to 6.7% for an income of €59,106. this amount is capped at the rate of €4,200.
VAT
in the Netherlands, the value-added tax is applicable on the sale of goods and services. These goods and services are to be rendered in the Netherlands.
Adding to that, this is also applicable to the goods and services that have been imported.
The VAT rates in the Netherlands are 21%, 9%, and 0%. Since 2019, the VAT for prime necessities has increased from 6% to 9%.
In the Netherlands, a special VAT rate of 0% is applicable on the following:
— Intra-EU supplies
— Exports
— Imports stored in bonded warehouses
— Services related to the above three
— Certain other services
Given below are the things that are exempt from VAT in the Netherlands.
— Supply of immovable property is exempt if it has been two years from use or lease. There will be a VAT when the lessee’s use of the property is 90% or more.
— Medical services
— Social services
— Cultural services
— Educational services
— Bank services related to transactions
— Financial institutional services
— Insurance transactions
— Transaction in shares
Gifts and Inheritance
The tax rate on gifts and inheritance is around 10% to 40% depending on the relationship.
Other taxes
Some other taxes levied in the Netherlands are as follows:
— Municipal tax on immovable property
— Excise tax
— Transfer tax
— Insurance tax
— Road tax
Given below are a few links related to taxes in the Netherlands, which will come in handy.
Tax Deductions in the Netherlands
Foreign tax relief and tax treaties
Other tax credits and incentives
Salaries
In the Netherlands, the average salaries range from €2,000 to €7,000 per month. The average annual salary in the Netherlands ranges from around €36,000.
However, there are certain positions which may pay an individual up to €14,500. They are:
— CEO
— IT Director
— Country Manager/Director
— Managing Director
— Leasing Director
— Economic/Financial Manager
— Air Traffic Controller
— Pilot
— Judge
— Head of the Legal Department IT Architect
— Technical Director
— Logistics Director
— Production Director
— Sales Director
— Marketing Director
— Lead Developer
— IT Manager
— Sailor
— Call Centre Director
On the other hand, certain positions like teacher’s assistant, security, etc., pay the lowest.
In any big city, a salary of €45,000 to €55,000 is good for living comfortably.
You may or may not require a work permit in the Netherlands as an expat. This depends on your country of origin.
For instance, people from the EU/EEA or Switzerland only need a travel document to work.
There is no need for a separate work permit to apply for a highly skilled migrant visa.
For people who do not qualify for the above-mentioned criteria, a work permit is needed.
In most situations, the work permit is taken care of by the employer in the Netherlands.
There are quite a few options for English-speaking people in the Netherlands.
Most employers will require you to be fluent in English as well as Dutch. Nonetheless, the lack of language skills can be substituted with superior professional skills.
Given below are the links for the expats who are looking for a job in the Netherlands.
Insurance
It is mandatory to have health insurance for everyone who lives or works in the Netherlands.
People other than the EU/EEA or Swiss nationals must get insurance. This should be within four months of getting the residence permit.
This can’t be avoided by such individuals even when they have a foreign insurance policy.
Given below are a few Dutch health insurance companies.
— LoonZorg
— OHRA
— UnitedConsumers
— ONVZ
— FBTO
— Zilvere Kruis
— De Friesland
— De Goudse verzekerigan
Some of the international health insurance companies in the Netherlands are:
— Cigna
— GeoBlue
— IMG Global medica Insurance
— Foyer Global Health
— SafetyWing
The Dutch government is accountable for the accessibility and quality of the healthcare system. However, it is responsible for the management of the healthcare system.
Healthcare in the Netherlands is funded via taxes, i.e., mandatory health insurance costs and income taxes.
Two types of costs are involved with Dutch health insurance, which is given below.
• Monthly premium (premie)
• Own Risk amount (eigen risico)
The own risk amount is an annual amount to be paid by a person. This covers certain treatments and medicines before health insurance is applicable.
As of 2022, the eigen risico is up to a maximum of €385. However, people who don’t have any medical costs in a year are exempt from this.
There are two types of Dutch health insurance namely:
• Compulsory Basic insurance (basisverzekering)
• Optional additional insurance (aanvullende verzekering)
Basic insurance in the Netherlands covers the following aspects.
— Doctor appointment
— Hospital stays
— Ambulance services
— Medical prescriptions
— Blood tests
— Dental care for children
— Limited dental care for adults
— Mental health care
— Medical specialist appointments
— Pregnancy
— Birth care
— Midwifery services
— Maternity care
— Handicapped care
— Aged care
— Nursing on location
— Certain therapeutic services
— Physiotherapy
Additional insurance coverage in the Netherlands covers the following aspects.
— Dental care for adults
— Emergency healthcare for travel overseas
— Acupuncture
— Chiropractic
— Homoeopathy
— Vaccinations
— Contraception
— Glasses and contact lens
— Hearing aids
— Plastic surgery
Insurance companies in the Netherlands are obliged to offer you a basic package. There are not able to deny coverage based on age, gender or health profile.
You are allowed to change your health insurance provider once per year.
Health insurance premiums can be partially covered by the healthcare allowance. This is when you have a low income and be deemed eligible for this.
Many multinational companies make agreements with insurance companies. In such circumstances, you may be offered a small discount on your health insurance.
There can be long waiting lists for certain services in the Netherlands. You don’t have to worry about the language because most doctors can speak fluent English.
Bottom Line
In another article, we will discuss other important aspects for expats in the Netherlands. They will be about the cost of living, visa, residency, citizenship, retirement, etc.
Hoping that you were able to find this information useful, especially as an expat in the Netherlands.
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