NETHERLANDS Law and Practice Contributed by: Nathalie Idsinga and Mignon de Wilde, Arcagna
ritorial expenses. As of 2025, the 30% ruling applies to a maximum annual income of EUR246,000. The 30% ruling is valid for five years, reduced by any period (in months) the employee spent in the Neth - erlands during the 25 years preceding immigration. It has been proposed to reduce the benefit of the 30% ruling to 27% as from 2027. Expatriates who held a 30% ruling during 2024 will remain subject to the old (30%) regime until the expiration of their ruling. Dutch Personal Income Tax for Non-Residents Non-resident individuals are subject to Dutch tax on income and assets that have a connection (nexus) to the Netherlands, such as substantial shareholdings in Dutch resident companies or Dutch real property. The actual Dutch tax liability may be reduced or eliminated under an applicable tax treaty for the avoidance of double taxation. Tax Treaties The Netherlands has entered into tax treaties with more than 90 countries. Under Dutch law, these trea - ties take precedence over domestic tax legislation. As part of the OECD BEPS project, the Multilateral Instrument (MLI) was introduced. The MLI is designed to prevent international tax avoidance and enhance co-ordination between tax authorities. The Nether - lands signed the MLI in June 2017, and Dutch Parlia - ment ratified it in March 2019. The instrument of rati - fication was subsequently deposited with the OECD. Depending on when other countries deposited their instruments of ratification, the MLI became effective for the dividends provision as of 1 January 2020, and for most other provisions as of 1 January 2021. As a result of the MLI, certain treaty benefits may be denied if, for example, a structure or transaction lacks eco - nomic substance or genuine commercial purpose. Gift and Inheritance Tax In the Netherlands, gift and inheritance tax is imposed under the Inheritance Tax Act 1956. Gift tax is due on gifts made by a (deemed) resident of the Nether - lands. For gift tax purposes, all individuals who emi - grate from the Netherlands are considered resident for one year after emigration, regardless of nationality.
Dutch citizens (at the time of emigration and the gift) are deemed resident for ten years after emigration. Inheritance tax is due on the worldwide assets of a (deemed) resident of the Netherlands at the time of death. The recipient is liable for the inheritance tax. Dutch citizens (at the time of emigration and death) are deemed resident for ten years after emigration. The estate of a non-resident decedent is not subject to Dutch inheritance tax. For gift and inheritance tax purposes, assets are val - ued at fair market value. The progressive rates for both taxes in 2025 are: • up to EUR154,197 – 10% (spouses/children), 18% (other descendants), 30% (others); and • EUR154,197 and above – 20% (spouses/children), 36% (other descendants), 40% (others). Individual exemptions apply to both inheritance and gift tax, depending on the relationship between the deceased or donor and the beneficiary (see 1.2 Exemptions ). Gift tax returns must be filed within two months after the end of the calendar year in which the gift was made. An inheritance tax return must be filed within eight months of the date of death. It has been pro - posed to change this deadline to 20 months. An extension may be granted upon request. If an heir residing abroad receives property from a Dutch resi - dent’s estate, heirs residing in the Netherlands are also jointly liable for the payment of the non-resident heir’s tax liability. Real Estate Transfer Tax The acquisition of Dutch real estate is subject to real estate transfer tax ( overdrachtsbelasting , or RETT) at a flat rate of 10.4%. As from 1 January 2026, the RETT rate for houses that are used as an investment prop - erty will be lowered to 8%. The RETT is due on the fair market value of the real property. To prevent tax avoidance, under certain conditions, shareholdings in real estate companies are treated as real estate for RETT purposes. This may also include shareholdings in non-resident (holding) companies if these interests, directly or indirectly, derive their value from real estate located in the Netherlands.
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