What is your tax residency?
Sometimes, your tax residency can lead to a discussion with the tax authorities. It is important to know whether you are regarded as a tax resident of the Netherlands. Most likely, your tax residency determines where you are taxed. When determining your tax residency, the Dutch tax authorities only look at the Dutch circumstances. The limitation here is that each country has its own rules. In this article, you can read more about tax residency and the prevention of double taxation.
Why do you need to know your tax residency?
The country of your tax residency determines the country you are taxed. But in addition to this, it determines:
- what tax return form you have to file (e.g., the M-form if you moved to the Netherlands);
- your social security;
- your position to allowances and tax benefits;
- whether you are eligible for the 30% ruling.
Where are you a tax resident?
Do you want to know whether you are regarded as a tax resident in the Netherlands? The Dutch tax authorities look at various ‘circumstances’, so there are no objective criteria. The following circumstances are important to determine your tax residency:
- The address where you spend most of your time.
- Where your family is living.
- Where you work, play sports, go shopping, etc.
- The country where you are insured and where your doctor is located.
- Where your children go to school also influences your tax residency.
Avoid double taxation!
So, are you a tax resident of the Netherlands? Then, the Netherlands wants to levy tax on your entire worldwide income. This also applies to your income from foreign work. Nevertheless, situations often arise where two countries want to levy taxes because, according to the law of both countries, you have to pay tax on certain income and/or assets.
Are you subject to double taxation? We are happy to help you avoid double taxation. Fill in the contact form or call us on + 31 (0) 20-2170120.
A good example of this is a holiday home in another country than the Netherlands. When you are a Dutch tax resident, you are taxed on your worldwide income (including this house). On the other hand, it is often sufficient for a country to tax real estate located in that country. Here, you are seen as a ‘non-resident taxpayer’. Both countries, therefore, want to levy tax on your holiday home. Fortunately, we have the tax treaties between the different countries for this. Such a tax treaty takes precedence over Dutch law.
We are happy to help!
Do you have problems determining your tax residency and do you want to avoid double taxation? Or do you have other tax-related questions? We are happy to help you! Feel free to contact us using the details below to discuss the possibilities.
Contact form:
Fill in our contact form and we will get in touch!
Call us:
+31 (0)20-2170120