Dutch Tax Authority adjusts Knowledge Group position regarding partial non-resident tax liability
Dutch Tax Authority adjusts Knowledge Group position regarding partial non-resident tax liability
Through a brief addendum to its earlier Knowledge Group position, the Dutch Tax Authority (Belastingdienst) today (21-11-2025) has nuanced its previous stance on partial non-resident tax liability.
The regime of partial non-resident tax liability was abolished as of 1 January 2025. However, an employee residing in the Netherlands for whom the 30% ruling was already being applied on 31 December 2023 may, under transitional rules, continue to benefit from the partial non-resident tax regime during 2025 and 2026. When the partial non-resident tax liability applies, shareholdings of 5% or more in companies not established in the Netherlands can be kept outside the Box 2 tax base. Additionally, under this regime the employee is not subject to Box 3 taxation on income from savings and investments, except for specific exceptions such as investments in Dutch real estate.
If an employee has a tax partner, Box 2 and Box 3 assets can be allocated between the partners. In its position published on 17 October, however, the Tax Authority’s Knowledge Group stated that the “own” Box 2 and Box 3 assets and income of a tax partner — who does not have a 30% ruling and therefore does not have access to the partial non-resident tax regime — cannot be allocated for tax purposes to the partner with the 30% ruling in order to keep that income (indirectly) outside Dutch taxation. Following publication of this position, criticism arose because it deviated from a line of practice, in place since 2001 and also promoted by the Tax Authority, for the treatment of inbound employees with a 30% ruling. In response, the Tax Authority has fortunately nuanced its stance by adding the following:
“This position deviates from the earlier policy that has been communicated and widely applied in administrative practice. In view of this, the Tax Authority will not apply this position up to and including tax year 2026. This means that the position will have no consequences for the allocation of shared income components to the partially non-resident taxpayer, because the transitional regime for the partially non-resident taxpayer expires as of 1 January 2027.”
With this welcome clarification, a great deal of uncertainty is avoided.
Through a brief addendum to its earlier Knowledge Group position, the Dutch Tax Authority (Belastingdienst) today (21-11-2025) has nuanced its previous stance on partial non-resident tax liability.
The regime of partial non-resident tax liability was abolished as of 1 January 2025. However, an employee residing in the Netherlands for whom the 30% ruling was already being applied on 31 December 2023 may, under transitional rules, continue to benefit from the partial non-resident tax regime during 2025 and 2026. When the partial non-resident tax liability applies, shareholdings of 5% or more in companies not established in the Netherlands can be kept outside the Box 2 tax base. Additionally, under this regime the employee is not subject to Box 3 taxation on income from savings and investments, except for specific exceptions such as investments in Dutch real estate.
If an employee has a tax partner, Box 2 and Box 3 assets can be allocated between the partners. In its position published on 17 October, however, the Tax Authority’s Knowledge Group stated that the “own” Box 2 and Box 3 assets and income of a tax partner — who does not have a 30% ruling and therefore does not have access to the partial non-resident tax regime — cannot be allocated for tax purposes to the partner with the 30% ruling in order to keep that income (indirectly) outside Dutch taxation. Following publication of this position, criticism arose because it deviated from a line of practice, in place since 2001 and also promoted by the Tax Authority, for the treatment of inbound employees with a 30% ruling. In response, the Tax Authority has fortunately nuanced its stance by adding the following:
“This position deviates from the earlier policy that has been communicated and widely applied in administrative practice. In view of this, the Tax Authority will not apply this position up to and including tax year 2026. This means that the position will have no consequences for the allocation of shared income components to the partially non-resident taxpayer, because the transitional regime for the partially non-resident taxpayer expires as of 1 January 2027.”
With this welcome clarification, a great deal of uncertainty is avoided.