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Global expatriate tax guide

Expatriate tax - The Netherlands

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Expatriates taking up employment in the Netherlands will be subject to comprehensive rules. The Global Mobility Services team at Grant Thornton Netherlands can help expatriates and their employers in dealing with Dutch visa and work permit requirements, tax matters, social security issues, pension and labour law.

In particular, the Global Mobility Services can assist expatriates and their employers in identifying Dutch tax planning opportunities and can assist with their global tax compliance.

Click on each of the areas below to expand for more information:

Facts and figures
Pre arrival procedures

Non-EU nationals typically need to apply for a residence and work permit before starting employment in the Netherlands. Additionally, it is essential to structure the expatriate's employment contract and benefit package in a tax-efficient manner prior to the assignment's commencement.

Tax year

For individual taxpayers, the Dutch tax year is equal to the calendar year.

Tax returns and compliance

In the Netherlands, there are various tax forms (C/M/P) for individuals, with the specific form depending on the individual's personal situation.

Due dates and extensions

The tax year-end is 31 December. Personal income tax filing should be completed before 1 May of the year following the tax year. However, an extension of the deadline by up to one year is possible when certain conditions are met.

Income tax rates
Taxable Income (€) Rate (%) Cumulative tax
1 – 38,139 9.32 3,554
38,139 – 75,624 36.97 13,858
Over 75,624 49.50 >

Please keep in mind that additional social security contributions are to be paid.

Basis of taxation
Charge to tax

The taxation of individuals in the Netherlands is based on residency for income tax purposes. Residents of the Netherlands are taxable for their worldwide income. Non-residents are only taxable for certain types of Dutch sourced income. The most relevant ones are employment performed in the Netherlands and real estate located in the Netherlands.


Whether an individual can be considered a resident for Dutch tax purposes depends on the facts and circumstances. Important criteria are location of a permanent home, intention of the individual, registration in a municipal register and the individual’s economic and social ties with the Netherlands.

Income from employment

Wages earned while working in the Netherlands are in principle subject to Dutch wage withholding tax. The wage tax rates are similar to the Dutch income tax rates and the wage tax may be credited against Dutch income tax. Dutch wage withholding tax applies to all income from employment including weekly/monthly wages, annual salaries, bonuses, commissions, director’s fees, non-approved pensions and any other cash earnings or benefits in kind. A foreign employer is in principle not obliged to withhold tax on wages unless that employer has a so-called permanent establishment in the Netherlands. A foreign employer may also voluntarily apply to act as a Dutch wage withholding tax agent.

Stock options and equity-based compensation

As from January 1, 2023 there have been changes regarding the taxation of employee stock options. Under the new regime, the starting point is that the benefit from employee stock option plans is taxed on the date that the shares, received when exercising the stock options, become tradeable. However, employees may instead choose/opt to be taxed on the date the option is exercised, which was the taxable moment up to and including 2022.

Stock options granted during the employment in the Netherlands and exercised after leaving the Netherlands can still be considered Dutch taxable wages.

A stock appreciation right (SAR) is essentially a cash bonus which in general is subject to taxation at the moment of pay-out.

In case an employee is granted or eligible to purchase company shares, this may also lead to taxable salary.

With regard to equity-based compensation, we recommend reviewing the terms and conditions of the plan prior to the introduction to determine the taxable moment and/or taxable treatment.

Source of employment

Any remuneration received for labor performed in the Netherlands is considered Dutch sourced income and is consequently subject to Dutch income tax, irrespective of the expatriate's tax residence status (subject to the relevant double taxation treaty).

Benefits (in kind)

Most benefits in kind provided by an employer will be subject to Dutch wage or income tax. For example, the usage of a company car is considered taxable income in the Netherlands (except if driven exclusively for business purposes).

Expatriate concessions

The Dutch 30%-ruling is a special tax facility for expatriates that are recruited from abroad to work in the Netherlands. Under this ruling, a maximum of 30% of the gross taxable wage can be paid out on a tax free basis to cover for so-called extraterritorial or ET-costs (additional costs incurred due to working outside of the country of origin).
As from January 1, 2024, an employer can reimburse a maximum of 30 percent of the employee's income tax-free, up to the "WNT standard" ("Balkenende standard"). Any amount exceeding this standard is subject to the regular tax rate. Based on the 2024 WNT standard (233,000 euros), this tax-free reimbursement amounts to 69,900 euros per year.

An expatriate eligible for the 30% tax ruling may choose to be treated as a partial non-resident taxpayer. This implies that they would be accountable for Dutch taxable income solely from employment (and/or business profits), home ownership in the Netherlands, and income from a substantial interest in a Dutch company. Please note that new legislation is expected in this area in 2024. Therefore, it is advisable to closely monitor any developments.

Relief from double taxation

The Netherlands has an extensive network of tax treaties with other countries.

Relief for foreign taxes

Relief to avoid double taxation may be claimed on the basis of tax treaties or the unilateral regulations, for expatriates who are Dutch tax residents. Residents are allowed either a tax exemption (with progression) or a tax credit.

Deductions from taxable income

In the Netherlands, an employee is not allowed to deduct any business expenses from his taxable income. On the other hand, an employer has numerous possibilities to reimburse business-related costs tax-free (see below 'Dutch labor cost regulation'). Therefore, the total salary package should be structured carefully.

Contributions to a non-Dutch pension plan borne by the employee are tax-deductible if the pension scheme qualifies for Dutch tax purposes (so-called 'corresponding approval').

The mortgage interest paid by the employee for the main residence can in principle be claimed in the Dutch individual income tax return. This also the case, within certain limits and criteria, with charitable and life insurance contributions and medical costs.

Finally, certain levy rebates may be applicable.

Other taxes
Capital gains tax

There is no capital gains tax in the Netherlands.

Principle residence

If you own a principle residence, you must add an amount to your taxable income in your Dutch individual income tax return: the owner-occupied home allowance (eigenwoningforfait). However, certain costs, including mortgage interest, are deductible.

If you sell your home, the surplus value (positive or negative) will result in the so-called owner-occupied home reserve. Do you have a positive owner-occupied home reserve? If so, the interest on the purchase of a new home is deductible over a maximum of the purchase price of your new home, minus the owner-occupied home reserve.

Inheritance, estate and gift taxes

A liability to Dutch inheritance and gift tax depends on the individual’s Dutch tax residence and domicile position.

Investment income

The Dutch tax residency rules determine an individual's liability for taxation on savings and other investment income. Proposed legislative measures suggest an increase in the tax rate from 32% to 36% effective from January 1, 2024. Moreover, the government proposes to maintain the tax-exempt asset amount in box 3 at €57,000 (€114,000 for fiscal partners) by not indexing it.
The basis for savings and investments is the yield basis at the beginning of the calendar year (reference date), to the extent that this yield basis exceeds the tax-exempt amount.

The effective yield percentage is determined by dividing the yield by the yield basis. Specifically, the yield is calculated as 0.01% of the value of bank deposits on the reference date and 6.17% of the value of other assets on the same date, with a reduction of 2.46% of the value of debts. If the calculated yield is negative, it is adjusted to zero.

It is important to note that this taxation system is considered transitional law until approximately 2027, when the new system for taxing income from savings and investments will come into effect.

Local taxes

There are several local taxes such as council charges, asset tax, water board tax and sewage fees.

Real estate tax

The municipality levies a real estate (property) tax on owners of immovable property. The amount of tax depends on the value of the immovable property. The percentages may differ per municipality.

Social security contributions

Social security contributions include both national insurance contributions and employee insurance contributions.

Social Security 2023 - 'National Insurance Contributions'

Taxable income (€) employer employee
1 – 38.139 nil 27.65%
over 38,139 nil nil

Social Security 2020 - 'Employee Insurance Contributions'

Earnings per year employer employee
Disability (WIA) 7.25% nil
Re-employment (Whk) 1.22% nil
Unemployment (WW) 2.64 / 7.64% nil
Health Insurance (Zvw) 6.57% nil
Child care 0.50% nil

The maximum premium income for the employee insurance contributions is capped at €71,624 for the year 2024.

Please do note that the employee insurance contributions are based on averages/estimates. The percentages for Whk premiums differ per industry and depend on the total annual fiscal wages of the employee.

Wealth tax

There is no wealth tax in the Netherlands.

Tax planning opportunities

Dutch Labor Cost Regulation
The Dutch labor cost regulation is mandatory and allows employers to provide their staff with tax free allowances and/or benefits in kind. For 2023 (the WKR budget) amounts to 3% over the first €400,000 of taxable wages and 1.18% of the taxable wages above €400,000, after 2023, the rate will be reduced to 1.92%. If the allowances and benefits exceed the WKR budget, the excess is considered taxable wages and is taxed at source at a rate of 80%, which is levied at the level of the employer or will be taxed otherwise.

There are several exceptions to this rule and employers and employees also need to meet several conditions when using the WKR budget. For instance, when the employer wants to provide staff with fixed allowances, those allowances need to be substantiated by conducting an investigation of the actual business costs before paying out those fixed allowances.

Noteworthy is that when an assignee working in the Netherlands receives employment income from a non-Dutch employer who does not have a Dutch wage tax withholding obligation, the employee may apply the WKR budget in the Dutch individual income tax return. However, any (fixed) allowances or benefits in kind received, should be treated as taxable income in such a case.

Stock Option Planning
Dutch stock option legislation has changed frequently the last years. Under the current legislation, stock options are in principle regarded as income from employment when the stock options are exercised. Previous stock option legislation and/or interim provisions might be applicable.

The tax approach of the Netherlands regarding cross-border stock option taxation is in line with the official OECD commentary, which means an allocation of the stock option benefits may be applicable.

Compensation package structuring
Tax planning and structuring of the remuneration package in a tax-efficient way is possible.

Earnings description Compensation structuring
Base salary Y
Bonus Y
Club membership N
Company car Y
Cost of living allowance Y
Education / schooling Y
Equity incentives Y
Foreign service premiums N
Housing Y
Home leave Y
Medical expenses Y
Moving expenses Y
Pension scheme / 401-K plan Y

Exemption from Netherlands’ Social Security
Apart from the EU regulation on social security, the Netherlands has concluded an extensive network of social security treaties with other countries. Based on these regulations and treaties, a foreign employee working in the Netherlands who has a Certificate of Coverage or an A1 (EU) may be exempt from making contributions to the Netherlands’ social security programmes. Careful planning is required

For further information on expatriate tax services in The Netherlands please contact:

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Louis de Vries
+31 (0) 88 676 9293