Who pays income taxes in The Netherlands?
Income of employment is being earned by taxpayers who live in The Netherlands or outside The Netherlands. The Dutch government has demanded that companies based in The Netherlands needs to withhold wage taxes regarding their employees. The next step is whether the income that is earned in The Netherlands needs to be taxed or the entire income of a resident or non-resident taxpayer should be taken into account in the Dutch income tax. In the Netherlands we describe 3 kind of taxpayers:
A resident taxpayer actually lives in The Netherlands. The social and economic centre is located in The Netherlands. If you are a resident taxpayer you should declare all your income, stocks, investments, savings which belongs to you in The Netherlands or outside The Netherlands. The tax office would like to know your world wide income.
As non-resident taxpayer lives outside of The Netherlands but has income from The Netherlands. For example the taxpayer lives in Belgium and is employed within a company in The Netherlands. The Dutch income is only subjected to tax in The Netherlands. If you own a property that is located in The Netherlands, then this is most likely also taxed in The Netherlands. The disadvantage of a non-resident taxpayer is that it cannot make use of credit and deductions. Solely this is possible if a non-resident taxpayer is able to qualify as a qualified non-resident taxpayer.
You are a qualified non-resident taxpayer if 90% or more of your world wide income is being taxed in The Netherlands.
Brouweel
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