Netherlands

Article 4 of the General Taxation Act prescribes that an individual's residence position is determined based on all (relevant) facts and circumstances. In case of a dispute, the Dutch tax courts will examine the person's durable ties of a personal (and, to a lesser extent, economic) nature with the Netherlands.

Under Dutch tax law, several criteria are used to determine the place of residence. The most important criteria include the following:

• Where a permanent home is maintained.

• Where employment duties are performed.

• Where the individual's family resides.

• Where the individual is registered with the local authorities.

• Where bank accounts and other assets are maintained.

• The intended length of stay in the Netherlands.

An expatriate is generally considered a resident of the Netherlands if:

• as a married person, their family accompanies them to the Netherlands, or

• as a single person, they stay in the Netherlands for more than one year.

Qualifying non-resident taxpayers and option regime

When a non-resident individual qualifies as a qualifying non-resident taxpayer, one is entitled to certain deductions and tax benefits that resident taxpayers are entitled to. Non-resident taxpayers have to fulfil a number of conditions to qualify for this scheme. The main conditions are that 90% or more of the taxpayer’s income should be subject to wage and income tax in the Netherlands and the individual has to reside in a European Union (EU) member state, in Bonaire, Iceland, Liechtenstein, Norway, Saba, Sint Eustatius, or Switzerland. A catch-all clause is included for situations in which less than 90% of the income of a non-resident taxpayer is subject to tax in the Netherlands, but where, based on European law, this taxpayer is nevertheless entitled to the application of personal allowances in the Netherlands. In addition, the non-resident taxpayer should also submit a declaration of income from the tax authorities in their country of residence.

Election to be treated as a partial non-resident

Under the provisions of the so-called '30% ruling', employees who are, based on facts and circumstances, considered as resident taxpayers may opt to be treated as partial non-residents. Partial in this respect implies that they are treated as residents for box 1 and as non-residents for box 2 and 3 purposes while they are entitled to personal deductions and tax credits.

However, this provision is being abolished. This means that they can no longer choose non-resident taxation for income in box 2 and box 3. The abolition will take effect from 2025. There is a transitional arrangement for expats, who were already using or could use this facility before 1 January 2024. They can make use of the partial non-resident taxation until the end of 2026.