Introduction
Dutch resident taxpayers with the 30% ruling could opt for the partial foreign tax liability until 2025 (or until 2027 through transitional law). As a result, they are considered non-residents in Box 2 (substantial interest) and 3 (savings and investments). In Box 3, no tax is then usually due, as non-residents are not taxed on bank and savings balances and investments. Otherwise, i.e. for Box 1 and also for the mutual allocation between tax partners of certain income and assets (free allocation) and personal deductions (such as gifts and alimony), they are treated as residents.
An exception to the latter applies to US nationals who qualify as partial foreign taxpayers. They are considered a limited domestic taxpayer in Box 1 because they are considered US residents (only) for the purposes of the tax treaty. As a result, they are taxed on e.g. employment income only to the extent the Netherlands is allowed to levy on it (Dutch work days). Something similar also applies to other residents who qualify as residents under Dutch law but are residents of the other country under a tax treaty and also to certain special groups of employees such as (diplomatic and consular) officials.
Partial non-residency and free allocation
In cases where one of the tax partners had the 30% ruling and the other did not, it was common practice to allocate the entire Box 3 assets to the partner with the 30% ruling. By opting for partial non-residency, no tax was then due, because as a non-resident for Box 3 purposes, the partner was not taxed on the assets (with the exception of a Dutch (2nd) residence).
However, on 17 October 2025, the Dutch tax authorities (DTA) took the position that the benefit of the partial non-residency only applies to the partner who uses the 30% ruling. Therefore, the free allocation cannot result in the other partner (non 30% ruling holder) indirectly benefiting from this. Thus, for the partner without the 30% ruling, the individual property share in the assets in Box 3 will be taxed; in addition, the property share of minor children will be attributed to the aforementioned partner (without the 30% ruling) with parental authority (usually a 50/50 attribution applies). The taxable basis can be allocated between the fiscal partners, but this will then be taxed in the regular way at this taxpayer with the 30% ruling. The idea that by allocating the partner’s share (including the allocated share of the child), the partner’s share becomes untaxed in box 3 has thus been abandoned.
Obviously, this is a considerable change of policy which may have a significant impact on the tax position of taxpayers and their partner, only one of whom benefits from the 30% ruling. Although the position is clearly and soundly based, we believe that different views are conceivable. Of course, we would be happy to discuss further with you what the consequences (may) be for your situation.
Tax return and assessment issues for limited resident taxpayers
A limited resident taxpayer is considered a resident under Dutch tax law. As a result, a so-called P-form (applicable resident tax return form) must be filed. However, for treaty purposes, he/she is a resident of another country which means the Netherlands has limited taxation rights.
The DTA has concluded that the income tax return is insufficiently equipped for these situations. This is because worldwide income must be declared and the tax return software does not provide for claiming a (full) exemption of income not taxable in the Netherlands due to the limited domestic tax liability status. As a result, an incorrect assessment will be imposed. To still receive a correct assessment, the competent inspector will have to be contacted. We are in contact with the DTA to work towards a practical solution.
