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Written by:
Bas Hollenberg



The option scheme for foreign taxpayers is now EU-proof!
In February we informed you about the upcoming measures regarding the ‘clawback scheme’. Yesterday these measures were published by State Secretary of Finance Weekers (VVD). The reason for adapting the tax system is that the old measures were in breach of EU Law.

Content measures
The new measures offer taxpayers the opportunity to be treated as a resident taxpayer.
Choosing to be treated as a resident taxpayer has the following effects;
If you opt for resident taxpayer status, the same tax rules apply to you as to any other resident of the Netherlands. In your tax return, you do not only state your Dutch income, but also your total worldwide income. In opting for this, you are able to deduct your mortgage interest.

In the past, the deduction made if there was negative income from foreign property holdings (mortgage interest for example) in a certain year was reclaimed if there was a positive foreign income in a following year. The Minister of Finance observed that the reversal of the deduction for negative income from foreign property for foreign taxpayers who earn 90% or more of their income in the Netherlands is in breach of EU law.

The State Secretary of Finance has approved the rule that foreign taxpayers (non-resident taxpayers) who earn 90% or more of their income in the Netherlands and who had deductions reclaimed under the clawback scheme, will not be able to claim the negative income from property in any following year. 

The measure will apply to foreign taxpayers who are residents of a Member State of the European Union or of Iceland, Norway or Liechtenstein (EEA states). To eliminate the possibility of double deduction the measure only applies if the taxpayer or his tax partner is not entitled to deduct mortgage interest in the Member State.

If you have any questions about the new measures don’t hesitate to contact our office for further information.

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