People working in the Netherlands have to apply for award of tax identification and insurance number called BSN (used to be called SOFI). This number is issued by Dutch tax office – Belastingdienst.

Tax settlement in the Netherlands is not mandatory. You need to remember though, that by not submitting your tax return, you will lose the possibility to reclaim tax refund. Everyone who legally worked in Netherlands and have a BSN number can apply for tax refund. The advances on income tax are deducted by your employer from your monthly gross earnings.

Dutch tax office divide taxpayers into two categories:

• Domestic taxpayers: people who live in the Netherlands regardless of their nationality.
• Foreign taxpayers: people who live outside of the Netherlands but gain income in the Netherlands