Netherlands

Remuneration of board members of a foreign company

As of 1 January 2023, the Dutch tax treatment of foreign remuneration of board members (‘directeuren en commissarissen’) of foreign-based companies has changed. The approval to avoid international double taxation on executive and supervisory board remuneration by using the exemption method instead of the credit method will expire. This means that the Netherlands will only provide an exemption for this type of income if the exemption method has specifically been agreed in the bilateral tax treaty.

Employment relationship

The Dutch Supreme Court ruled that all the circumstances of the case must be looked at to determine whether an agreement should be considered an employment contract. If one or more conditions for an employment relationship (i.e. work, salary, authority) are specifically breached in some respects, this is not sufficient to exclude an employment relationship. As of 2025, the Dutch tax authorities will check again more strictly whether an employment relationship exists, in this transitional year normally no fines will be levied. In 2026 a new law will be implemented to clarify if an employment relationship exists. 

Expat ruling changes: Cap and scale back

As of 1 January 2024, the 30% ruling (expat facility) can be applied to a maximum of the standard under the Standards for Remuneration Act (WNT-norm) (2025: 246,000 EUR). In the case of expats who were already using the 30% ruling in 2022, the cap is only going to take effect as of 1 January 2026. In case the 30% ruling is applied as of 2023, then the income is subject to the cap as of 1 January 2024.

Furthermore, the 30% ruling is scaled back to 27% as of 2027 for the total duration of the expat ruling. A transitional law will apply to employees who have already applied the expat ruling in 2024.

Lastly, the partial non-resident status has been abolished as of 2025. This means that qualifying expats can no longer choose for non-resident taxation for income in box 2 and box 3. 

Adjustments to box 2 

Two tax brackets have been introduced in box 2 as of 2024: a basic rate of 24.5% for the first EUR 67,804 (2025) of income per person and a rate of 31% (2025) for the remainder. 

Adjustments to box 3 

While the government is still working on a new box 3 system, which will be implemented as of 1 January 2028 at the earliest, a transitional system has been introduced for the years 2023-2027. This transitional system takes into account the actual asset mix of a taxpayer and divides these assets into three categories: (i) bank deposits (savings); (ii) other assets; and (iii) debts. The value under each category on 1 January will be deemed to yield a fixed percentage. The weighted average yield over all categories will be applied to the total assets above a personal exemption of EUR 57,684 (2025) to determine the taxable benefit that will be subject to tax at a flat rate of 36% (2025). However, recently, the Supreme Court ruled that taxation in box 3 must be based at most on the actual return instead of the transitional system. So it is now up to taxpayers to demonstrate that the actual return achieved is lower than the lump sum calculated.