If you live in the Netherlands, you qualify as a resident taxpayer. If you live abroad and receive income from the Netherlands that is taxable in the Netherlands, you qualify as a non-resident taxpayer. In both cases, you will be subject to Dutch income tax.
For income tax purposes, there are three types of taxable income, classified into three so-called boxes.
The following expenditure can be deductible in Box 1:
The following expenditure can be deductible in Box 2:
Residents of the Netherlands should declare their entire worldwide income in their income tax return. This worldwide income also includes the revenue which the Netherlands is not allowed to tax under national and international regulations. Examples of such revenue are income from employment, profits from business activities or capital in other countries.
Non-resident taxpayers, emigrants and immigrants can choose whether or not they want to be treated as taxpayers resident in the Netherlands. This choice is known as the right of option (keuzerecht). If you opt for resident taxpayer status, you should declare your entire worldwide income received in 2008. In that case, it is possible that your foreign revenue is also taxable in another country. To avoid a situation where you have to pay tax in both countries, the Netherlands grants a credit against the tax owed, which is known as double tax relief.
Partners are taxed individually where possible. This means that – in principle – you yourself pay tax on your own income, and you can only utilise your deductible expenditure yourself. However, there also exist some types of joint income and deductible expenditure. You can apportion this joint income and deductible expenditure between yourself and your partner, in accordance with your personal situation.
Each box has its own tax rates. You can find more information here. Also certain tax credits apply which change every year.