Starting a business in the Netherlands: 30% ruling and tax structures

Starting your own business or going freelance in the Netherlands means thinking about tax. Different tax structures will have different impacts on your business. TaxSight has written this guide to explain the differences so you can decide which is best for you. 

If you are planning to become a freelancer or entrepreneur in the Netherlands, you're going to want to set up the most tax-efficient business structure. It can take a little knowledge and planning to get this right, but the impact it can have on your business and its finances makes it worthwhile. Here's an explainer to help you understand the different options you have for structuring your business.

Business structures

In the Netherlands, the most common business structures are:

• Sole proprietorship
• A limited liability company (the so-called BV). This option may allow you to get the 30% tax ruling.

Sole proprietorship

A sole proprietorship (eenmanszaak) is a transparent entity, which means that it is linked to the private owner. The owner is liable for the company’s obligations and taxes. The owner is, after the deduction of all costs, taxed for the profit of the company. These taxes are due via their personal income tax return.

Tax differences for sole proprietorships

Profit exemption

As a sole proprietor you may be entitled to the general small company discount (MKB -winstvrijstelling) of 12,70 percent (as of 2025) of your gross profit. The profit exemption is only granted if you fall into the lower tax bracket of 37,48 percent.

Self-employed persons deduction

Any applicable tax credits may also be claimed. The self-employed tax deduction (zelfstandigenaftrek) is 2.470 euros in 2025, but will be reduced each year until it becomes 900 euros in 2027.

In addition, you can also claim the starters deduction (startersaftrek) of 2.123 euros, which is applicable for the first three years of being a sole-proprietor.

The most important requirement to claim these tax credits (zelfstandigenaftrek or startersaftrek) is that you have worked for your business for at least 1.225 hours in the calendar year. This includes not only direct working hours, but also hours you spend on travelling, market research, administration and more.

VAT

When you register a sole proprietorship, you are usually automatically registered for quarterly VAT filing.

A limited liability company (BV) and the 30% tax ruling

You also have the option to freelance through your own incorporated BV and pay yourself a salary. This option may allow you to apply for the 30% ruling if you fulfil the general criteria. The liability and taxability by operating as a BV are different from operating as a sole proprietor.

Obligations as a BV

The BV is treated as a separate entity to the owner and has to meet additional requirements, such as filing monthly payroll tax returns, quarterly VAT returns, an annual corporate income tax return and filing the annuals at the chamber of commerce.

Shareholders and salaries

A shareholder who owns 5 percent or more of the shares of a BV is obliged to receive a salary if they perform work for the company. The BV is obliged to withhold wage tax on the salary.

The obliged salary needs to be determined on the basis of the usual wage rules. This means that the salary needs to be determined on the basis of performed work by the shareholder and has to be at least 56.000 euros (as of 2024) gross on annual basis.

An exception may apply if the BV does not generate sufficient income or the work performed is very limited.

30% ruling requirements

The minimum required salary to benefit fully from the 30% ruling is around 67.000 euros. However, the minimum salary to be eligible for the 30% tax ruling is 46.660 euros (as of 2025).

The wage tax rates are the same as the tax rates for the sole proprietorship. However, the effective tax rate may be lower if you are an employee of the BV with the 30% ruling application. This is due to the fact that only 70 percent of your salary is taxed.

Note that the maximum tax free amount will become 27 percent starting 2027. Employees who got the ruling before 2024 can apply the 30% until their eligibility for the ruling ends.

Maximum tax free amount

The 30% ruling can only be applied up to a maximum salary of 246.000 euros (as of 2025).

Starting in 2026, the maximum will also apply to employees who fall under the transitional period, which are employees who were receiving the 30% ruling before 2023.

The 2025 tax rates

BV taxes

After all company costs are deducted, the profit of the BV will be taxed. The corporation tax rates in the Netherlands for 2025 are:

• 19% on the first 200.000 euros of the taxable profit
• 25,8% on profits exceeding 200.000 euros

The net profit after taxation can be paid out as a dividend to the shareholders whenever desired.

The dividend tax that the BV is obliged to withhold is 15 percent. Additionally, the dividend payment will be taxed with another 9.5 percent up to a threshold of 67.804 euros (as of 2025) in Box 2 of the shareholders personal income tax return, which makes the total rate 24.50 percent.

The total tax burden (corporate and income taxes) on distributed dividends is therefore around 39 percent in the first bracket. The Box 2 rate for dividends above 67.804 euros is 31 percent (as of 2025). That makes the combined tax rate for the higher Box 2 tax bracket around 44 percent, provided that the 19 percent corporate tax rate applies.

If the 30% tax ruling applies, it can be more beneficial to distribute an additional salary instead of a dividend.

BV as a good alternative

The BV structure, in combination with the 30% ruling, may be an appropriate alternative to sole proprietorship if you are planning to start a business in the Netherlands. This is especially the case if you expect to generate a sufficient income and anticipate your business growing over multiple years. The BV also offers more flexibility with salary payments and dividends.

When setting up a BV in combination with the 30% ruling, it is important to take the right actions on time. That applies when you are moving to the Netherlands to start your business, as well for employees who are switching from regular employment to their own business.

Do you need tax advice on starting your own business? TaxSight has many years of experience in local and International tax matters, and will be happy to help. Contact their team by calling +31 (20) 261 3221 or emailing info@taxsight.nl.