€3.7 billion in undeclared work poses challenge for Dutch tax authorities

While millions of Dutch citizens are filing taxes, a substantial number are earning income off the books, posing a persistent challenge for authorities. Jobs like cleaning, babysitting, and home repairs are frequently paid in cash without reporting to the Belastingdienst, the Dutch tax authority, Nu.nl reports.

The CBS estimates that in 2021, 3.7 billion euros was earned through undeclared work after deducting expenses for materials and other costs. Cleaning and handyman services are the sectors with the highest amounts of unreported income.

Despite the scale, government enforcement remains limited. “We have to direct our capacity and expertise in a risk-based manner,” said a spokesperson for State Secretary Eelco Eerenberg of Finance. “That involves making choices between international networks and babysitters.”

Individual tips from neighbors or private citizens are low priority unless verified by official partners such as labor inspectors or municipalities. “If a neighbor is not officially identified as a suspect by authorities, the chance of enforcement is very small,” the spokesperson said.

Undeclared work occurs when transactions are not reported to the Belastingdienst and no tax is paid. Small jobs for family or friends with reimbursement for expenses are exempt. Otherwise, income should be reported under “Income from other work” on tax returns. For jobs such as cleaning or babysitting, no formal business administration is required. “We have to trust that people report these earnings accurately,” the spokesperson added.

The tax authority does not levy income tax on earnings up to €8,700, though they must still be reported. Income between €8,700 and €38,441 will be taxed at 35.82 percent in 2025.

Secondhand sellers on platforms like Marktplaats and Vinted also have reporting obligations if they make consistent profits. Notorious sellers are monitored: platforms report users who sell more than 30 times or for over €2,000. Casual sales, such as outgrown baby clothes sold at a loss, are not included.

Authorities acknowledge the difficulty in balancing enforcement against high-risk international networks while many smaller domestic earners remain largely invisible to oversight.