7. Partial non-resident tax status
This series addresses the most relevant topics regarding the 30 percent ruling. In this post: What is the partial non-resident tax status?
The partial non-resident tax status is an interesting additional benefit of the 30% ruling.
Residency for Dutch income tax purposes is based on actual facts and circumstances. Various factors are considered in this respect, such as the intended Dutch employment or assignment period, whether an employee moves to the Netherlands together with his family and where the centre of the employee’s personal and economic life is expected to be.
An employee who qualifies as a resident taxpayer of the Netherlands is in principle taxable in the Netherlands on his worldwide income (including income from savings and investments). Under the 30% ruling, however, an employee is eligible to opt for the status of “partial non-resident taxpayer” of the Netherlands for the duration of the 30% ruling.
As a result, the employee is fully taxable in Box I (income from home and work) and partly, or likely not taxable at all, in Box II (25% tax on income from substantial interest) and Box III (30% tax on a progressively determined deemed income from savings and investments). An employee who elects for the partial non-resident status is in Box II and III only liable to tax on income from a Dutch substantial interest respectively (entitlements to) Dutch real estate and certain profit-sharing in a Dutch company.