20220722-KPMG_Global-Netherlands_–_Decree_on_Taxation_of_Directors_Paid_by_Foreign_Companies_4页_274kb

The Dutch Ministry of Finance revoked a decree effective January 1, 2023, which previously provided tax exemption for directors' fees from foreign companies via the exemption with progression method. This change eliminates the tax disparity between directors of Dutch-based and foreign companies.

Under the new arrangement, tax treaties grant relief primarily through the foreign tax credit method. If the foreign tax paid is less than the Dutch tax liability, an additional tax may be imposed in the Netherlands. This could increase overall income tax for globally-mobile directors, impacting assignment costs, tax compliance, and policy considerations for such payments.

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