Expats in The Netherlands (Holland)

13 April 2016

We provide the following services to expats

  • 30% tax ruling
  • income tax return and refund

Introduction Taxation

The Dutch government aims to create an attractive environment and welcomes knowledge workers and talent from abroad. The Netherlands is on the international list of most attractive countries to do business with. However, administrative hurdles and bureaucracy need to be targeted to make access to our country a reality.

If we look at the Dutch tax system, we have created a number of facilities that makes doing business and working in the Netherlands favourable over other countries. For individuals there is the 30% tax facility, which allows employers to cover 30% of an employee's remuneration as a tax-free expense allowance. This rule is applied for specialised foreign employees who are brought to the Netherlands because their skills are scarce in the Dutch marketplace. In this section, you will read more about the details and other aspects of taxation in the Netherlands.

We offer personal income tax advice. We can provide you with such services as filing your tax return, applying for the 30% ruling, tax advice if you want to buy a house, general employment conditions, and tax financial consequences or benefits of living with a partner.

Our knowledge of tax law and financial matters doesn’t stop at the Dutch border. We can inform you about international tax treaties and international income issues.

If possible, we can calculate salary split advantages (income divided into two countries against lower tax rates).

Tax collecting

The Tax Administration collects through different channels.

Wage taxes

The most important one for employees is the wage withholding tax. Everyone in the Netherlands who is in paid employment is subject to wage tax. The employer that pays the wages withholds the tax and pays it to the Tax Administration. These taxes consist of one amount made up of taxes and social security contributions. Social security contributions must be paid for the old age pension (AOW), surviving relatives benefit (ANW) and exceptional medical expenses (AWBZ).

The wage tax is an advance tax payment for the income tax. In this way, it is prevented that taxpayers have to pay a single large payment for income tax and social security contributions once a year. The employer withholds the wage tax at the time the employee receives his/her salary.

Income tax

Persons who have an income pay income tax. Individuals may receive income from different sources. Income tax takes into account the origin of the income and distinguishes three categories. These categories are known as ‘boxes'. The income in each of the three boxes is taxed at a different rate. The total of the tax owed in the three boxes is the income tax payable.

Taxation International Aspects

Individuals resident in the Netherlands are subject to income tax on their worldwide income. This is known as resident tax liability. Measures have been taken to avoid double taxation whereby resident taxpayers pay tax twice on all or part of their worldwide income or profits.

In addition, persons who do not live in the Netherlands are subject to income tax on income from a number of sources in the Netherlands. These non-resident income tax payers subject to income tax may still opt to be treated as residence taxpayers. They will also be entitled to the deductions and levy rebates available to resident taxpayers.

Avoiding double taxation for resident taxpayers

Resident taxpayers can avoid being taxed twice on their foreign-source income and foreign-source profits in two ways. In the first place, the Netherlands has concluded bilateral tax treaties with a large number of countries. In the second place, the Netherlands has unilateral provisions that in general apply to situations where no treaty has been concluded with a specific country or where a tax treaty does not include a provision pertaining to a specific case.

Taxation of non-resident taxpayers

Non-resident individuals are subject to income tax in the Netherlands for the following types of income derived in a calendar year:

  • taxable income from work and dwellings in the Netherlands;
  • taxable income from a substantial interest in a company established in the Netherlands;
  • taxable income from savings and investments in the Netherlands.

If you have any further questions, please fill out the contact form. One of our English speaking tax consultants will contact you in due course.