Resident taxpayers vs non-resident taxpayers in the Netherlands

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In the Dutch tax legislation a distinction is made between resident taxpayers and non-resident taxpayers what has to be reported and therefore included in your Dutch tax return.

Dutch tax resident are taxable in the Netherlands for their worldwide income (except for individuals that have the 30%, for period eligible).

Dutch tax non-resident are only taxable in the Netherlands for certain income elements such as salary received from a Dutch employer (other situations of employment taxable in the Netherlands can be applicable as well), Dutch real estate owned and in case you own more than 5% of the shares of a Dutch BV or NV.

In case you immigrated to or emigrated from the Netherlands than the same distinction as described above between resident and non-resident taxpayer is applicable and has to be included in the M(igration) form.

When are you a resident taxpayer or a non-resident taxpayer?

In order to examine whether an individual is liable to pay taxes as a resident taxpayer or a non-resident taxpayer is based on facts and circumstances. With many countries the Netherlands has a tax treaty that states how tax residency should be determined. Still both countries can see an individual as resident taxpayer on their local legislation and then the treaty should determine what country is the country of residence.

The treaty also states which country may levy taxes on e.g. the income from employment. If this is considered taxable in the working state then the home country (country of residence) should grant a double tax relief or credit.

In most cases individuals that live in the Netherlands are considered resident taxpayers as of the moment they come to the Netherlands.

The Dutch tax legislation and therefore system has divided the income elements to be taxed in a box system. The income elements are considered taxable either in box 1, box 2 or box 3.