Insights

Immigration to the Netherlands is possible via a number of routes. In this paper we will focus on immigration to work in the Netherlands as an employee or entrepreneur, and what that entails.

The Netherlands offers an incentive for Knowledge Migrants (kennismigranten) to relocate to the Netherlands to live and work in the form of the so-called 30% Ruling. In short, qualifying migrants are taxed on 70% of their gross salary – in other words, 30% of their salary is disregarded for tax purposes – for a maximum period of 5 years. By way of example, if a qualifying migrant was offered a gross salary of €100,000 per annum and was granted the 30% ruling, they would be taxed on a taxable income of €70,000 (€100,000/100 x 70).

Dutch residents are taxed on their worldwide income. Non-residents are taxed on income with a Dutch source, subject to certain exemptions (for example applicable tax treaties). A person’s residence is prescribed in law as determined based on all relevant facts and circumstances.

South African residents are taxed on their worldwide income. Credit is granted for foreign taxes paid on income from a foreign source up to the maximum rate of taxation applicable in South Africa. Non-residents are taxed on income from SA sources.

The UK charges income tax on a progressive basis, with different rates applicable to different levels of income. The rates of taxation depend on whether a taxpayer is resident in England, Wales or Northern Ireland, or alternatively Scotland.

UK resident companies are taxed on world-wide profits (with non-UK permanent establishments (‘PEs’) having an opt-out) whereas non-resident companies are subject to corporate tax on the trading profits of a UK PE or income with a UK source (broadly speaking). An extensive tax treaty framework and dividend exemption create additional multiple exceptions and carve-outs to the general rule.

South African resident companies are taxable on their worldwide income in the first instance. Non-resident companies are taxed on income that has a South African source only.

In general, Dutch resident companies are subject to CIT on worldwide income with exemptions from taxable profit available under Dutch law as well as relevant tax treaties. Non-resident companies are generally only taxed on income with a Dutch source.

In the European Economic Area (comprising all 27 EU Member States plus Iceland, Liechtenstein and Norway), VAT is a supranational tax whereby policy is set at the EEA level to ensure consistency across member states but execution of that policy is left to the individual member nations.