It’s more than just the 183 days, it’s “all relevant facts and circumstances”

People often assume that you are only a Dutch tax resident when you reside more than 183 days in the Netherlands, but determining whether you are a tax resident in the Netherlands can be surprisingly complex. Unlike some jurisdictions that clearly define residency with specific numerical thresholds, Dutch tax law uses a broader, more nuanced approach. Article 4 of the Algemene Wet inzake Rijksbelastingen (Dutch General Tax Act) emphasizes that tax residency must be assessed based on “all relevant facts and circumstances.” But what exactly does this mean in practice?

Why does tax residency status matter?

Being classified as a tax resident significantly impacts your tax obligations. Dutch tax residents are taxed on worldwide income, while non-residents only pay taxes on certain income generated within the Netherlands. Understanding your residency status is therefore critical to avoiding unexpected tax liabilities.

Factors considered in establishing tax residency

When the Dutch Tax Authorities (Belastingdienst) evaluate your residency status, they look at several crucial factors, each weighed according to your personal situation. There are a couple of more obvious factors that definitely make a strong case of showing you are a Dutch tax resident, though they are not decisive on their own. Having a home in the Netherlands that you regularly use, suggests a significant personal connection. Especially if this home is your primary residence. It does not matter if it is a rental or a house you bought. A registration with your local Dutch municipality (gemeente) reinforces your intention to reside permanently in the Netherlands, but the absence of it does not solely determine tax residency. The Dutch Tax Authorities will also look into your daily (family) life. Having family or a partner in the Netherlands indicates strong residency ties. Your economic and social activities have a big influence on whether or not you will be seen as having meaningful ties. Besides employment, or owning a business, things like a gym membership or a Dutch bank account show that you have strong connections with the country.
Last but not least, regularly spending considerable periods in the Netherlands is a strong indicator. Although there is no fixed number of days that automatically results in tax residency, typically spending more than 183 days per year in the country, will be advocate for your Dutch tax residency.

Insights from Case Law

Several court decisions have shown that these criteria are applied.
A professional, who worked full-time in the Netherlands, but maintained a family home abroad, was nevertheless considered a Dutch tax resident. The decisive factors included their substantial presence and significant economic activities within the Netherlands. Conversely, an individual who owned property in the Netherlands but primarily lived and worked outside the country was deemed not to have sufficient personal or economic ties to qualify as a tax resident. The property alone was insufficient without substantial presence or economic activity. These cases illustrate that the authorities assess each situation individually, considering a holistic view rather than isolated elements.

International aspects and double taxation treaties

Sometimes individuals may qualify as residents in two countries simultaneously. Since Dutch tax residents must pay taxes on their worldwide income, this could result in double taxation. To avoid this, tax treaties between the Netherlands and other countries apply. These treaties usually include clear “tie-breaker” rules, assessing elements such as the location of your permanent home, your center of vital interests, habitual abode, and nationality to clarify your official tax residency.

Final Thoughts

Understanding the implications of the “all relevant facts and circumstances” criterion in Dutch tax law is essential. While this flexible approach allows tailored assessments, it also means individuals must stay vigilant and proactive in managing their residency status and associated tax obligations.

If you’re uncertain about your position, feel free to contact us at Habsburg Legal Services

Written by Marinka
Tax Lawyer (jurist) and Startup/Business specialist