New Dutch tax rules for non-residents in 2015

Broadstreet has been advising professionals, entrepreneurs and expats on reaching their personal and financial goals for over 25 years. In this article, they explain how tax works on your worldwide assets.

If you live outside the Netherlands and you earn income or have assets in or from the Netherlands, then you have a non-resident taxpayer status. This means you need to file a tax return and pay taxes in the Netherlands for this income.

Non-resident taxpayer status

If you are a non-resident taxpayer based outside the Netherlands, filing an income tax return for Dutch income or assets can put you in a less favorable financial position as you may miss out on tax deductions.

Until the end of 2014 you could opt to have Dutch resident taxpayer status. This meant you could claim the same deductions as a local resident when calculating your tax.

New requirements for non-residents

Starting January 1, 2015, you can only qualify for non-resident taxpayer status, which offers the same benefits as for Dutch residents, if you:

› Live in an EU country or in Liechtenstein, Norway, Iceland, Switzerland, Bonaire, Sint Eustatius or Saba.

› 90 per cent or more of your worldwide income is taxable in the Netherlands.

› Obtain a statement from the tax authorities in your country of residence with an overview of the income declared in your country of residence.

The changes will have consequences as from your 2015 tax return. If you do not meet all conditions, you are no longer entitled to the advantages that the Dutch resident taxpayer status entails.

For example, you can no longer deduct the mortgage interest on your primary residence located outside the Netherlands, or deduct personal expenses such as alimony payments.

Advantages of non-resident status

The qualifying non-resident taxpayer is entitled to the same deductions as residents of the Netherlands. You are entitled to:

› Personal allowances (this can be a deduction on your income, for example when you have study costs or certain medical expenses).

› Deduction of expenses for income provisions (annuities).

› Deduction of maintenance costs for listed (monumental) buildings.

› Deduction of the negative expenses from your owner-occupied home abroad (mortgage interest).

› Tax-free allowance, when calculating your income from savings and investments (21.330 euros in 2015).

› The full amount of the tax credit that applies to your situation. If you have national insurance in the Netherlands (child benefit, old age pension, survivor benefits or exceptional medical expenses), you are entitled to both the premium and tax parts of the credits.

› Divide certain income, deductible items and payment of the tax credits between you and your partner if your partner has little or no income.

Tax status for couples

According to the new rules, couples can only qualify as tax partners if both pay tax in the Netherlands on more than 90 per cent of their worldwide income or worldwide combined income.
 

Patricia van der Hut is a partner at Broadstreet, providing specialist tax and accountancy services to expats.

Previously under the name Finsens, the tax, accountancy and payroll divisions were renamed Broadstreet in 2016.