Lately we have received a lot of queries about a so-called emigration tax or Exit Tax. A motion was passed by parliament in October, asking the government to explore options for restricting tax evasion when leaving the Netherlands e.g. through a fictitious domestic tax liability after emigration. The parliament has requested a response before the end of the year. As this is only a motion, it is by no means certain whether this will have any further legal effect. No conclusions can yet be drawn from this and the government’s response to the motion should be awaited.
In late 2023, two amendments to the 2024 tax plan were adopted that further restricted the 30%-ruling. This involved the reduction of the tax-free percentage to 20% after 20 months and to 10% after another 20 months, as well as the abolition of the partial non-domestic tax status. These restrictions have since been amended via the 2025 tax plan. With effect from 2027, the maximum tax-free allowance will be 27% instead of 30%, and this rate will remain in place throughout the duration of the 30%-ruling period.
The option for the partial non-domestic tax status however will no longer be possible from January 1st, 2025. For employees who already were eligible for the 30%-ruling at the end of 2023, there is a transitional arrangement through which they can still opt for partial non-domestic taxation until the end of 2026.
As was the case in 2024, the 30% ruling is capped to a certain income level called the WNT norm (also known as the Balkenende norm). In 2024 this amount is € 233.000 on an annual basis. For 2025 this will be increased to € 246.000. This means that the 30% will not be applied to the part of the income that exceeds this amount. There is a transitional arrangement for employees for whom the 30%-ruling was applied over the last pay period (December) of 2022. For these employees, the 30%-ruling will only be capped from January 1st, 2026.
As described here, in the summer of 2025 a form can be filled in by taxpayers whose actual return was lower than the fictitious return in a given year. However, this must be specified and supported with documentation.
The actual return consists of the actual income on your box 3 assets. For instance, interest received on a bank account or loan, dividend income, capital gains and losses on e.g. shares or real estate, rental income, etc. The Supreme Court ruled that expenses will not be deductible, with the exception of interest on debts in box 3. Furthermore, both realised and unrealised gain should be included in the levy, e.g. a decrease in the value of shares or an increase in the value of real estate. To determine the value of property, the WOZ value is used.
In most cases a reduction will not be possible if there is a substantial increase in the WOZ value of a second home or holiday home. This underlines the importance of objecting against the WOZ value if it is on the high side.
For box 3, there are no major changes in 2025 compared to 2024. Under this system, the savings, other assets and debt categories each have their own percentage of fictitious return based on the value per beginning of the year. In 2025, the tax-free wealth increases to € 57.684 (€ 115.368 for fiscal partners). Based on the asset mix, an average return is calculated on the total assets. The flat rate on the fictitious return in box 3 was 36% in 2024. This will remain the same in 2025.
Legal proceedings have been going on for years about the fictitious way of levying tax on the box 3 capital. After all, a fictitious return was assumed that was many times higher than that received on the savings account. Ultimately, the Supreme Court ruled in December 2021 that the fictitious calculation of box 3 for the years 2017 and 2018 can be disproportionately burdensome and therefore in violation of the human rights treaty. According to the Supreme Court, legal redress must be offered to taxpayers who have objected.
On June 6th last, the Supreme Court ruled that the legal redress as offered by the Tax Office can still be disproportionately burdensome. This brings a levy based on actual income on assets a step closer. In the summer of 2025, taxpayers will be able to submit their actual box 3 return to the Tax Office through a form. In the meantime, it is important to appeal against final assessments if your actual return is lower than the fictitious return.
In 2025 a new bracket will be added to the Income Tax in box 1 for individuals who have not yet reached the state pension (AOW) age. The below chart gives an overview of Box 1 income tax in 2024 and 2025:
Income Tax – AOW not reached
2024
Income Tax – AOW not reached
2025
First bracket up to € 75.518
36,97%
First bracket up to € 38.441
35,82%
Second bracket from € 75.518
49,50%
Second bracket from € 38.441 – € 76.816
37,48%
Third bracket from € 76.816
49,50%
For taxpayers who have reached the state pension age the following rates and brackets apply for 2024 and 2025:
Income Tax – AOW reached
2024
Income Tax – AOW reached
2025
First bracket up to € 38.098
19,07%
First bracket up to € 38.441
17,92%
Second bracket: € 38.098- € 75.518
36,97%
Second bracket: € 38.441 – € 76.816
36,97%
Third bracket from € 75.518
49,50%
Third bracket from € 75.624
49,50%
*other brackets apply to people born before 1 January 1946. For box 2 rates, please refer to the business section of the newsletter.
It isn’t hard to find reasons to move and start a business in the Netherlands or to move to the Netherlands with your business.The Dutch are known for having a good business climate. Not only is there good infrastructure, good healthcare and education, but the Dutch government actively promotes foreign direct investments. Here are a few things you will have to consider or do, when setting up a business in The Netherlands!
Structure
When bringing your business to The Netherlands or starting a business in the Netherlands, you will have to choose the right business structure for your business. We can help to determine which structure suits your company best. It can have a very big impact on your tax liability.
Registration
It sounds pretty straightforward, but yes, the first step if you want to set up your business in the Netherlands is to register with the Chamber of Commerce (KvK) and also with the Dutch Tax Office (Belastingdienst). We are happy to do this on your behalf. The communication with the Dutch Tax Office especially as a foreigner, can be time-consuming and complicated when having just moved country for example.
Eligible
It is wise to check if you are eligible for the Dutch tax benefits and deductions. Here is an overview of the available deductions:
Self-employed deduction: This is a fixed deduction for self-employed entrepreneurs who meet certain conditions resulting in lower income tax.
Starting deduction: This is a deduction for starting entrepreneurs, who qualify for the self-employed deduction. This applies for the first three years of business.
SME Profit Exemption: A percentage of the profit from small and medium-sized enterprises (SMEs) is exempt from tax. This reduces taxable profit and thus the amount of payable tax.
Small Businesses Scheme (KOR): If your annual turnover is less than €20,000, you may qualify for the KOR. This means you do not have to pay VAT, but you also cannot reclaim VAT.
Investment Deduction (Investeringsaftrek): This includes the small-scale investment deduction (KIA), energy investment deduction (EIA), and environmental investment deduction (MIA). These deductions are designed to encourage investments in business assets, energy-efficient, and environmentally friendly technologies.
30%-ruling: click here to view the most recent update, as the ruling has undergone a lot of changes recently. This favourable ruling allows the employer to reimburse 27% of the employee’s gross salary tax-free.
There are various requirements for these tax benefits and rulings. We can help you check if this applies in your situation and if you are eligible.
Complete service
Not only can we help you with registering your business and helping you choose the right structure for your business in the Netherlands, but also afterwards it is important to keep up to date with the latest changes in the Dutch tax laws. Finally, there are quarterly and yearly tax returns that will have to be filed. We would be happy to look after these as well. We offer a complete service, from setting up your business, to filing the needed returns and making sure your business is gaining maximum tax benefit, yet is tax-compliant as well. Contact us now!
The advantageous 30% ruling is getting harder to obtain! Read more here.
Restrictions
Last year, it was abruptly decided that the 30%-ruling was to be restricted. The maximum tax-exempt reimbursement of 30% would no longer apply for up to 60 months; instead, after every 20 months, the reimbursement would decrease by 10%. So, it would go from 30% to 20%, and eventually down to 10% for the last 20 months. This restriction was immediately met with a lot of criticism; it was seen as disavantageous to the Netherlands’ business and investment climate and would make for too much administrative hassle. In 2024, the 30% ruling was set to be evaluated again, and there were already suggestions that the restriction might be reversed. And that is exactly what happened in the Dutch Tax Plan 2025!
In the 2025 Tax Plans, the previously implemented restriction is being revoked, but, unfortunately, the 30% ruling will be limited in another way which is described below.
The 27% ruling
The maximum tax-free reimbursement of 30% will be reduced to 27% starting as of 2027.
In addition, from 2027 onwards, the income threshold for the 30%-ruling will be raised from €46,107 to €50,436. For employees under 30 years old with a master’s degree that are making use of the 30%-ruling, the income threshold will increase from €35,048 to €38,388. This is a significant increase, which will be indexed annually. In addition there is no longer an option to choose for partial non-domestic taxation from 2025 onwards.
These measures will result in fewer expats qualifying for the ruling and a decrease in the tax-exempt reimbursement. For all expats who already qualified for the 30% ruling before January 1, 2024, the maximum tax-exempt reimbursement will remain at 30% for the entire duration and they will be able to opt for partial non-domestic taxation until 2026.
Suurmond Tax consultants will, as before, be at your side to help you gain the 30% ruling – although there are a lot more restrictions than there used to be, of course. We have obtained favourable results in many different situations.
Or do you already have the 30%-ruling and is it ending soon? Then contact us and we can advise as to the consequences and tax optimisation possibilities!
In the Netherlands, capital gains and actual rental income on a property are currently not taxed. Instead, the Dutch tax authority assumes a fixed yield of up to 6.04% on your total asset value as per January the first, regardless of the actual return on your assets. However, this system is set to change soon, as the government soon plans to transition Box 3 into a system in which the actual return is taxed, including capital gains.
What will the new system look like?
Under the new box 3 system, which is expected to be introduced in 2026, unearned income such as interest, dividends, and rental income will be taxed annually. Additionally, tax will be levied on changes in the value of assets, including capital gains or losses on shares and appreciation or depreciation of property values.
What is the difference to the current system?
Currently the Tax Office assumes a fixed fictitious percentage of your wealth to be unearned income. A distinction is made between three different categories; these are bank accounts, debts, and other assets. For 2024 the fictitious yield is 1.03% for bank accounts, 6.04% for other assets, and 2.47% for debts. On this yield, 36% tax is due.
This system can be advantageous if you have assets with a high return (higher than the fictitious return) as you only pay tax on the lower fictitious return. However, if your assets have a lower return, the tax can be disproportionately substantial. In the new system this will no longer be the case, and you will be taxed on your actual income and capital gains.
What about the tax-free threshold?
It is expected that instead of a tax-free wealth threshold in Box 3, there will be a tax-free income threshold instead. Income from assets that exceed this exemption will be subject to taxation.If you would like to inquire about the latest box 3 developments and how your assets and unearned income are taxed, please contact us and we will be glad to advise you!
Wij gebruiken technologieën zoals cookies om informatie over uw apparaat op te slaan en/of te raadplegen. We doen dit met als doel om de beste ervaring te bieden en om gepersonaliseerde advertenties te tonen. Door in te stemmen met deze technologieën kunnen wij gegevens zoals surfgedrag of unieke ID's op deze site verwerken. Als u geen toestemming geeft of uw toestemming intrekt, kan dit een nadelige invloed hebben op bepaalde functies en mogelijkheden.
Functioneel
Always active
De technische opslag of toegang is strikt noodzakelijk voor het legitieme doel het gebruik mogelijk te maken van een specifieke dienst waarom de abonnee of gebruiker uitdrukkelijk heeft gevraagd, of met als enig doel de uitvoering van de transmissie van een communicatie over een elektronisch communicatienetwerk.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistieken
De technische opslag of toegang die uitsluitend voor statistische doeleinden wordt gebruikt.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
De technische opslag of toegang is nodig om gebruikersprofielen op te stellen voor het verzenden van reclame, of om de gebruiker op een site of over verschillende sites te volgen voor soortgelijke marketingdoeleinden.
