Tax guide for US Expats in the Netherlands for FY 2025

The Netherlands continues to attract US expats with its rich culture, excellent infrastructure, and high English proficiency. But what does life here mean for your taxes?

US Expats and Taxes in the Netherlands: What You Need to Know

1. Dual Filing Obligations Remain

As a U.S. citizen living abroad, you must file a U.S. tax return reporting your worldwide income, without exception. If you reside in or earn income from the Netherlands, you will likely also be required to file a Dutch tax return.

2. Dutch Tax Residency and Filing Requirements

• Residents are taxed on worldwide income. If your only Dutch income is from traditional employment, payroll withholding often covers it. But additional income typically requires a return (income like foreign income, self-employment, or investment earnings).
• Non-residents only pay Dutch tax on Netherlands-sourced income. This includes salaries from Dutch employers, work performed in the Netherlands, Dutch real estate, substantial shareholdings in Dutch firms, or board positions (see: Dutch Tax Administration).

3. Are You a Tax Resident?

You’re generally considered a Dutch tax resident if you have ties such as:

• A primary home in the Netherlands
• Family living here
• Dutch employment or economic ties (e.g., bank account, insurance)

Dutch Income Tax Structure for 2025

The Netherlands divides taxable income into three “boxes”, each with its own rates:

Box 1: Employment, Business, Homeownership

• €0–€38,441: 35.82% (8.17% tax + 27.65% social premiums)
• €38,442–€76,816: 37.48%
• Over €76,816: 49.50%

Box 2: Substantial Shareholding (≥5%)

• Up to €67,804: 24.5%
• Above that: 31%

Box 3: Savings and Investments (Wealth Tax)

Assessed on a deemed return, taxed at 36% after subtracting the exemption.

Expats & the 30% Ruling: Important Changes in 2025

The popular 30% ruling has undergone a big change.

As of January 1, 2025, those using the 30% ruling can no longer claim partial non-resident status, meaning Box 2 and Box 3 incomes must now be reported in the Netherlands.

Transition rules apply if you utilized the full 30% ruling by the end of 2023—you may continue partial non-resident status until 2026.

Filing Deadlines & Tax Credits

• Tax Year: Calendar year (Jan 1–Dec 31)
• Filing Deadline: May 1 of the following year
• Extensions: Available only if you’re registered with a tax agent

From 2025, the general tax credit is calculated based on total income (Box 1 + 2 + 3), which can reduce payroll withholding and possibly result in repayment at year-end.

Other Dutch Taxes to Know

• VAT (BTW): Standard rate is 21%, reduced rate 9%, some items 0%
• Inheritance & Gift Tax: 10%–40%, depending on relationship
• Property (OZB): Municipal real estate tax based on property value
• Transfer Tax (Real Estate): 2% paid by buyer
• Insurance Tax: 21% on premiums, with several exemptions
• Road Tax / Vehicle Tax: Based on weight and fuel type
• Corporate Tax:
  • Up to €200,000 profit: 19%
  • Above €200,000: 25.8%

US–Netherlands Tax Treaty & Social Security

• Tax Treaty: Designed to avoid double taxation, defining taxing rights and providing relief. As a US national and Dutch resident, you’ll need to use treaty provisions and tiebreaker rules where both countries claim residency.
• Social Security Totalization Agreement: Prevents you from paying into both US and Dutch systems and helps preserve benefits from both.

Summary Living as an Expat: 2025 Tax Highlights

Topic	Update for 2025
Box 1 Rates	35.82%, 37.48%, 49.50%
Box 2 Rates	24.5% up to €67,804; 31% above
Box 3 Rate & Exemption	36% on deemed return; €57,684 exemption per person
30% Ruling Changes	No more partial non-residency; Box 2 & 3 must be declared
Tax Credits	General tax credit based on total income; labor tax credit slightly increased

Need help navigating expat taxes in the Netherlands? Whether you want clarity on filing rules, insights into the 30% ruling changes, or help leveraging treaty benefits—we’ve got you covered. Contact us or schedule a consultation with our expat tax experts today!