NETHERLANDS Law and Practice Contributed by: Nathalie Idsinga and Mignon de Wilde, Arcagna
the employee’s gross salary to cover deemed extrater - ritorial expenses. As of 2026, the 30% ruling applies to a maximum annual income of EUR262,000. 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. As of 1 January 2027, the benefit of the 30% ruling will be reduced to 27%. 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 elimi - nated under an applicable tax treaty to avoid 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 the Dutch Parliament ratified it in March 2019. The instrument of ratification was subsequently deposited with the OECD. Depending on when other countries deposited their instruments of ratification, the MLI became effec - tive 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 economic 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 of the gift) are deemed residents 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 2026 are: • up to EUR158,669 – 10% (spouses/children), 18% (other descendants), 30% (others); and • EUR158,669 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. The deadline for filing an inheritance tax return has been changed from 2026. An inheritance tax return must be filed within twenty months if the date of death is after 1 January 2026. Otherwise, the deadline is eight months after the date of death. 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 of 1 January 2026, the RETT rate for houses used as investment properties was 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 pur - poses. This may also include shareholdings in non-
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