Residents of the Netherlands should declare their entire worldwide income in their income tax returns. This worldwide income also includes the revenue which the Netherlands is not allowed to tax under national and international regulations. Examples of such revenue are income from employment, profits from business activities or capital in other countries.

In the year of immigration, you can choose whether or not you want to be treated as a taxpayer resident in the Netherlands throughout the year. This choice is known as the right of option. For more information, see Right of option for immigrants. If you opt for resident taxpayer status, you should declare your entire worldwide income received in 2008. This also includes the revenue received before your emigration that is not taxable in the Netherlands. In that case, it is possible that this foreign revenue is also taxable in another country. To avoid a situation where you have to pay tax in both countries, the Netherlands grants a credit against the tax owed, which is known as double tax relief.

Double tax relief

If you opt for resident taxpayer status, you should declare your worldwide income in the Netherlands, including the revenue which the Netherlands is not allowed to tax under national and international regulations. Possibly, this revenue is also taxable in another country. To avoid a situation where you have to pay tax in both countries, you are entitled in the Netherlands to a credit, known as ‘double tax relief’, against the income tax owed. A condition in this respect is that the balance of your foreign revenue should be positive. This revenue therefore reduces the amount for which the double tax relief is granted. The Dutch Tax and Customs Administration determines the relief on the basis of your tax return.

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