Country Guide
Dutch Income Tax 

The definition of Tax Residence can differ significantly between countries. Even if the same definition is used, the criteria or calculation methods may vary. In other words, the tax residence must be determined based on the domestic rules of the countries involved.

Here is the definition used in the Netherlands.

Before you dive into the 183-day rule, please check if the host country offers an exemption for short postings.

Cross-border postings can trigger immediate host country taxation, creating a disproportionate administrative burden. To address this, some countries offer exemptions, like the Netherlands with its 60-day rule.

The definition of 'employer' is crucial to applying the 183-day rule. Two interpretations exist: the legal employer (also called the formal employer) and the economic employer (also called the material employer).

The Netherlands applies the economic employer approach. Here, you will find what that entails.

If the employer has a permanent establishment (PE) in the host country  that bears the employee's remuneration, this immediately invalidates the 183-day exemption and triggers host country taxation.

Here, you will find the Dutch approach to the third condition of the 183-day rule.

Bilateral Treaties on Double Tax Avoidance prevent double taxation. 

When the Host country taxes employment income, the Home country typically provides relief through exemption or credit mechanisms. The specific relief method depends on the applicable tax treaty and domestic legislation. 

Here, you will find the Dutch approach.

Expatriates may benefit from specific tax concessions designed to alleviate the financial burden of moving and working abroad. The Netherlands has implemented such concession by offering a special tax regime for expatriates, called the 30% ruling.

Non-resident taxpayers are only taxed in the Netherlands on Dutch-sourced income. Foreign salary is not considered Dutch-sourced if all of the following conditions are met:

• The employer is foreign

• The work is physically performed outside the Netherlands

• The income is not otherwise connected to Dutch activities