Leaving the Netherlands? New Tax Residency Proposal Could Affect You
The Dutch government is considering new rules that could extend your tax obligations even after you've left the country. A recent political motion suggests that wealthy individuals relocating to low-tax countries might be treated as Dutch tax residents for up to five years after emigration.
What’s Happening?
A motion approved by the Dutch parliament this week urges the government to look into ways of addressing “tax avoidance” by individuals moving abroad—particularly to low-tax jurisdictions. The concern? That people who’ve benefited from the Dutch system shouldn’t be able to avoid taxes by simply changing residence.
One of the suggestions under discussion is the introduction of a 5-year deemed tax residency rule after migration. While not official policy yet, the proposal could have serious consequences for Dutch nationals and expats alike.
What Is Deemed Tax Residency?
In this context, deemed residency means that someone is treated as a Dutch tax resident even after they’ve moved abroad - solely for Dutch tax purposes.
Here’s how the proposal might work:
- If you move to a low- or no-tax country (like Monaco or Dubai), the Dutch tax authorities could continue to treat you as a Dutch resident for tax purposes for up to five years.
- This would not apply to moves within the EU, thanks to tax treaties.
- The approach is inspired by existing rules in Dutch inheritance and gift tax, where people remain subject to Dutch rules for 10 years after emigration.
This marks a shift in Dutch tax policy, which traditionally focused on attracting investment and talent, rather than discouraging emigration.
Why Is This Important for Expats?
Even if you’re not Dutch, the proposal could affect you if:
- You’ve spent time working in the Netherlands and plan to relocate.
- You are considering moving your assets or business abroad.
- You are a high-net-worth individual seeking tax residency in a different jurisdiction.
It’s also worth noting that the Netherlands already has strict rules for determining tax residency. These are based on “facts and circumstances” - not simply the number of days spent in the country. So if you keep a home, family, or business ties in the Netherlands, you may still be considered a resident regardless of where you live.
In many cases, that framework is already effective in addressing questionable tax migrations, raising the question of whether additional deemed residency rules are necessary - or fair.
What Are the Risks?
If implemented, a 5-year deemed residency rule could:
- Lead to double taxation if the destination country does not offer treaty protection.
- Create uncertainty for individuals planning legitimate relocations.
- Make the Netherlands less attractive to mobile entrepreneurs or international professionals.
Stay Informed and Be Prepared
While the rule is still only a political proposal, it signals a broader shift in how the Dutch government views tax mobility.
If you are considering leaving the Netherlands or are involved in international tax planning, now is the time to:
- Review your tax residency status and long-term plans.
- Assess potential risks if relocating to a low-tax jurisdiction.
- Seek expert advice to make sure your move is compliant and efficient.
Need Help?
Do you want to understand how this proposal might impact you? Our team of tax advisors specializes in expat and international tax matters. We help clients stay ahead of legal changes and avoid costly surprises.
Reach out via our website to schedule a consultation—we’re here to help.