€3.7 Billion Hidden Economy: Undeclared Work Troubles Dutch Tax Authorities
While millions of residents in the Netherlands submit their tax returns, a significant number continue earning money off the books. Many small jobs, including cleaning, babysitting, and home repairs, are often paid in cash without being reported to the Belastingdienst (Dutch tax authority).
According to data from the CBS (Statistics Netherlands), about €3.7 billion was earned through undeclared work in 2021 after deducting costs such as materials and other expenses. The largest amounts of unreported income were linked to cleaning services and handyman work.
Despite the scale of the hidden economy, enforcement remains limited. A spokesperson for the office of State Secretary of Finance Eelco Eerenberg explained that authorities must focus their resources strategically, prioritizing cases that pose greater financial risks. This often means concentrating on large international networks rather than small domestic jobs.
Tips from neighbors or private individuals about undeclared work are generally treated as low priority unless confirmed by official partners such as labor inspectors or municipalities. Officials say enforcement is unlikely if a person has not been formally identified as a suspect by authorities.
Undeclared work occurs when income is not reported to the Belastingdienst and no tax is paid. Small jobs done for family or friends with simple expense reimbursement are exempt, but most earnings should be reported under “Income from other work” on tax returns. For jobs like cleaning or babysitting, workers do not need a formal business administration, meaning authorities largely rely on people to report their income honestly.
The tax authority does not charge income tax on earnings up to €8,700, although the income must still be declared. Earnings between €8,700 and €38,441 are expected to be taxed at 35.82 percent starting in 2025.
People selling secondhand items on platforms such as Marktplaats and Vinted must also report income if they consistently make profits. Online platforms are required to flag users who sell more than 30 items or generate over €2,000 in revenue. However, casual sales like selling used baby clothes at a loss are not considered taxable income.