Ending of partial foreign tax liability

25 January 2024
Currently, taxpayers who are resident in the Netherlands and utilse the 30% tax facility can select to be treated as foreign taxpayers for box 2 (inkomen uit aanmerkelijk belang) and box 3 (inkomen uit sparen en beleggen) in their aangifte inkomstenbelasting (income tax return). This partiële buitenlandse belastingplicht (partial foreign tax liability scheme) will end from 1 January 2025.

 Read more about the types of income tax payable in the Netherlands on the government.nl website.

Through this option scheme, these individuals are effectively not taxed on their foreign private assets in the Netherlands. The ending of the partial foreign tax liability will result in these individuals being taxed on their foreign private assets as from 1 January 2025, if and to the extent there is taxable income according to the Belastingdienst tax standards.

An overgangsregeling (transitional arrangement) applies to this group of employees, whereby the ending of the partial foreign tax liability scheme will not apply immediately from 1 January 2025, but only from 1 January 2027. To be eligible for the transitional arrangement, the employee – as for the transitional rule for the scaling-down of the 30% rule – must have received a lump-sum untaxed compensation under the 30% rule for the last salary period of 2023.

Source: Vakblad Grensoverschrijdend Werken

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