You have become taxable in the Netherlands, the question comes up which kind of personal income tax return you need to fill in and submit to the Tax Authorities. Which choices do you have?
Type of personal income tax return
We have various types of personal income tax returns in the Netherlands. Which tax return you need to file depends on your personal situation. The most important types for expats are:
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Resident tax return (P-form): You will have to state your worldwide income and assets/debts in the tax return. If you have foreign income and assets/debts, the tax treaty between the Netherlands and the foreign county will determine if you can apply for a relief to avoid double taxation in your Dutch tax return.
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Non resident tax return (C-form): If the Netherlands is not the country of your fiscal residence, but you earn income or have assets/debts in the Netherlands, and these are taxable in the Netherlands, you file this tax return.
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Immi-/emigration tax return (M-form): If you come to, or leave the Netherlands, you file this tax return for that particular calendar year.
30% ruling – choice for partial non resident tax status
If you have the 30% ruling and you reside in the Netherlands, your tax status will be treated specially. You can choose to be considered a partial non resident tax payer for the Boxes 2 (substantial shareholder income) and 3 (income over the balance of assets/debts). This means that you still file a P-form, but for the Boxes 2 and 3, you only state the income and assets/debts as if you were a non resident tax payer. This is highly beneficial because you can save/invest as much as possible and avoid paying taxes over your savings/investments, while living in the Netherlands during the time you are eligible for the 30% ruling. Additional properties in the Netherlands next to the owned primary residence in the Netherlands would still be taxed.
Change partial non resident tax status
The special choice for tax payers with the 30% ruling will be abolished from the 1st of January 2025. You will not be considered a partial non resident taxpayer anymore for the Boxes 2 and 3. This means that you will have to state your world wide income for all Boxes in your tax return, just like a regular resident tax payer. Transitional law applies if the 30% ruling was applied to the payroll in December 2023, based on a 30% ruling decision. The transitional law means that the option for partial non resident tax liability is also possible in the years 2025 and 2026. This option will expire from 1st of January 2027.
Individuals, who have the BO or AO status, are also partial non resident tax payer for the Boxes 2 and 3. They will not be affected by the change in legislation as per 1st of January 2025.
Authors: Leo Oudshoorn and
Kavita Sewkaransing,
Wecountancy Expat Services
www.wecountancy.com.