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Netherlands: Personal Taxation

Special Expatriate Fiscal Regime

The Dutch income tax law does not define the term 'resident' and therefore resident or non-resident status is decided on a case by case basis. The most important factor in determining residency status is an individual's economic tie with The Netherlands; this includes the family home, employment in the country and entry into the local authority register.

An expatriate can apply for for a 30% tax-exempt allowance, the exemption extends to 30% of social security tax as well as income tax, and tax-free reimbursement of school fees for expatriates' children.

The chief condition which the employee must satisfy is that he has some specific expertise which is not readily available in Holland, but this is normally deemed to be the case for an employee of a multinational corporation.

Conditions were added/amended from the start of 2012. These now include the requirement that an employee must be aged 30 years or over and the gross annual salary must be at least EUR50,000. Employees aged under 30 may be eligible if they have attained a PhD in the Netherlands or abroad, but who has remained in the Netherlands to work. The minimum annual salary requirement for individuals under 30 is EUR38,008.

If the application is successful the employee can elect to be treated preferentially for a period of up to eight years (10 years prior to 2012).

If the employee has lived in the Netherlands prior to the application then this period of residence will be deducted from the eight year period. If the expatriate employee changes employer he will have to re-submit his application and establish that the criteria of unavailable specific expertise still applies.



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