This document provides an overview of the Dutch tax system and opportunities for tax planning for expatriates working in the Netherlands. It outlines the basics of taxation including tax rates, deductions, and social security contributions. It also discusses planning opportunities for structuring compensation packages and benefits to maximize tax efficiency. Grant Thornton's Global Mobility Services team can help expatriates and employers navigate the Dutch tax system and identify tax planning strategies.

1. This fact sheet provides an overview of the Dutch tax
system and planning opportunities…
…expatriates taking up employment in The Netherlands
will be subject to our comprehensive rules.
Grant Thornton’s Global Mobility Services team can help
expatriates and their employers in dealing with Global
Mobility Services.
In particular Grant Thornton can assist expatriates and
their employers in identifying Dutch tax planning
opportunities and provide compliance services.
INTRODUCTION
Tax Year
The Dutch tax year runs from 1 January to 31 December.
Pre-arrival Procedures
The employers of non-EU nationals are usually required to
apply for a work permit and a residence permit prior to the
employee taking up employment in The Netherlands.
Further it is important that the expatriate's employment
contract and benefit package is structured in a tax efficient
manner before the start of the assignment.
Employment Visas
A work permit and a residence permit must be acquired to
allow the expatriate to live and work in The Netherlands.
When the expatriate is an EU national the above procedure
is usually not required.
Tax Return Deadline
The tax year-end is December 31. Filing should be done
before April 1 of the year following the tax year. However,
under certain conditions, extension of the deadline is
possible.
Charge to Tax
A charge to Dutch tax is dependent on the facts and
circumstances. Certain levy rebates may be applicable.
BASIS OF TAXATION
Residence and Domicile
The taxation of individuals in The Netherlands is based
either on residence or on certain Dutch-source types of
income.
Residents
A resident of The Netherlands is taxable for his worldwide
income.
Non-residents
A non-resident of The Netherlands is only taxable for
certain types of Dutch source income. The most relevant
ones are employment performed in The Netherlands and
real estate located in The Netherlands.
Special tax regime for expatriates
For expatriates, a special regime applies. If all the relevant
conditions are met, 30% of the gross remuneration may be
paid out free of tax to the expatriate. The effective top tax
rate is then 36.4% instead of 52%. In addition to this,
several cost items may be reimbursed tax-free. Careful
planning is recommended.
Income from Employment
Wages are subject to Dutch wage withholding tax. The tax
rate is similar to the Dutch income tax rates. Dutch wage
withholding tax may be credited against Dutch income tax.
Dutch wage withholding tax applies to all income from
employment including weekly wages, monthly salaries,
annual salaries, bonuses, commissions, director’s fees, non-
approved pensions and any other cash earnings or benefits
in kind. A non-Dutch based employer is in principle not
obliged to withhold this tax on wages. However, if that
employer has a so-called permanent establishment in The
Netherlands, there is an obligation to withhold. A non-
Dutch based employer may also voluntarily apply for
withholding.
Source of Employment
As mentioned above, where duties are performed in The
Netherlands, any remuneration received in respect of these
duties is treated as Dutch source income and subject to
Dutch income tax regardless of the expatriate's tax
residence status (subject to the relevant Double Taxation
Agreement).
Benefit In Kind
In general where the benefit is enjoyed in The Netherlands,
a Dutch income tax charge will arise.
Relief for Foreign Taxes
Relief for double taxation may apply on the basis of tax
treaties and/or the unilateral regulations for such relief.
Deductions against Income
In The Netherlands, no deduction by the employee is
allowed for business expenses. On the other hand, an
employer has numerous possibilities to reimburse business
related costs. The total salary package should therefore be
structured carefully.
Pension scheme contributions borne by the
employee are tax deductible provided that the pension
scheme qualifies for Dutch pension purposes.
Mortgage interest paid by the employee for the main
residence is tax deductible. Also, within certain limits, gifts,
life insurance contributions and medical costs are tax
deductible.

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PLANNING OPPORTUNITIES
In cross-border situations, tax, social security and pension
planning is possible.
As of January 1, 2015 the labour cost regulation is
compulsory. This new regime replaces the previous
regulations and involves all possible employee
compensation and benefits. The main rule is that all
employment related reimbursements and provisions are
deemed to be taxable wage, exceptions apply.
Tax planning and structuring of the remuneration package
in a tax efficient way is possible.
Earnings description Planning possible
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
INCOME TAX RATES & SOCIAL SECURITY
Income Tax Rates - 2015
Taxable Income (€) Rate (%) Cumulative tax
1 - 19,822 8.35 1,655
19,822 - 33,589 13.85 3,561
33,589 - 57,585 42 13,639
over 57,585 52 >
Social Security 2015 - 'National Insurance
Contributions'
Taxable income (€) employer employee
1 - 33,589 nil 28.15%
over 33,589 nil nil
Social Security 2015 - ‘Employee Insurance
Contributions’
Earnings per year employer employee
Disability (WIA) 4.95% nil
Re-employment (Whk) 1.15% nil
Unemployment (WW) 4.23% nil
Health Insurance (Zvw) 6.95%
Child care 0.50% nil
Please note that the maximum premium income for the
employee insurance contributions is capped at EUR 51,976.
In addition to the above percentages additional premiums
can be applicable which differ per branche.
Substantial interest
Dividends distributed by a corporation in which the
shareholder has a so-called substantial interest (i.e., 5% or
more of the shares), suffer a 25% flat tax.
STOCK OPTIONS
Dutch stock option legislation has changed frequently the
last years. Under the current legislation stock options in
principle are 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 issues, is in line with the
official OECD Commentary, i.e. an allocation can be
applicable.
MISCELLANEOUS
Investment Income
The expatriate's Dutch tax residency will determine
whether someone is subject to tax on savings and
investments. Savings and investment income is taxed at
30%. This rate is applied to 4% of the value of the relevant
assets as per January 1. The effective tax rate is therefore
1.2% of the value of the assets less a threshold. The actual
savings are not relevant.
Capital Gains
There is no capital gains tax in The Netherlands.
Local Taxes
There are no local taxes applied to an individual in The
Netherlands, but there may be a requirement to settle
council charges, e.g. for water and refuse maintenance.
Wealth Tax
There is no wealth tax in The Netherlands.
Inheritance & Gift Tax
A liability to Dutch inheritance and gift tax depends on the
individual's Dutch tax residence and domicile position.
Tax Planning
Most tax planning involves the structuring of employment
arrangements to take advantage of various tax concessions.
Grant Thornton can further advise you on this.
Contact details – Global Mobility Services
Arthur A. Gude LL.M. - Tax Director
T +31 (0)88 676 91 90
F +31 (0)20 547 57 00
E arthur.gude@gt.nl
www.gt.nl
P.O. address: Office address:
P.O. Box 71003 De Passage 150
1008 BA Amsterdam 1101 AX Amsterdam
The Netherlands The Netherlands
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