FAQ’s: Tax for Expat – Immigrants in The Netherlands
Can I choose in which country I pay tax?
No, you cannot. Where you pay tax depends on a couple of items. First of all, you must determine which country you are a tax resident. When you work in the country of which you are a tax resident, you are taxed in that country. When you work outside of the country where you are a tax resident, you are – generally speaking – taxable in the country where you work. In a tax treaty, this general rule is overruled by the so-called 183-day rule. It is a set of conditions that need to be met to avoid host country taxation. The details of these conditions may somewhat differ from one tax treaty to another. But as a general rule of thumb, you cannot simply choose where you pay tax.
How can I save on taxes?
When you want to keep your tax bill as low as possible, it is crucial to plan as much as possible in advance. Tax planning makes it much easier to reduce your tax burden than taking certain positions (if at all possible) after the facts occurred. Generally speaking, in most countries, there are two ways to reduce your tax bill. First is to make use of an expatriate tax regime. Relevant examples exist in the Netherlands, Belgium, Spain, France, Denmark etc. Also, some countries have beneficial tax planning possibilities when you have international duties. It may allow you to spread income over various tax jurisdictions, utilising lower tax rates.
In the Netherlands, there is a top tax rate of 49.5% Why is this so high?
First of all, when you qualify for the 30% ruling, the rate is only 34.65%. Second, the Netherlands may have a reasonably high top rate; it has a tax-friendly taxable basis. For example, the Netherlands does not tax capital gains.
Can I file a joint Dutch return with my partner?
In the Dutch tax system, all taxpayers file their own return. Some income elements, however, can be shifted from one taxpayer to another. It can be the case, for example, with mortgage interest and private assets.
Which professional expenses are tax-deductible in the Netherlands?
Most professional expenses cannot be deducted from taxable income. However, employers have the possibility to provide (tax-free) reimbursements of expenses to their employees. When negotiating an employment agreement, it is essential to be fully aware of the options your employer offers.
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Global HR & Mobility Market Updates
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30% Ruling – Salary Criteria in 2021
The employee’s annual taxable salary must be more than € 38,961. To compare in 2020 it was € 38,347.
The 2021 salary thresholds for Highly Skilled Migrants (HSM)
The 2021 salary thresholds for Highly Skilled Migrants (HSM), recent graduates and Blue Card holders in the Netherlands have been announced.
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