Leaving the Netherlands with shares in a foreign company? How the eight-year rule avoids Dutch exit tax

Quick answer: do I owe Dutch exit tax on shares in my foreign company?

Not if three conditions are all met: the company is not established in the Netherlands for tax purposes, you leave within eight years of becoming Dutch resident, and you have not lived in the Netherlands for more than ten years in total in the 25 years before you leave.

Dividends received and shares sold during your stay are still taxed in the Netherlands. Unrealised growth at the time of departure is not.

Expats who move to the Netherlands for a few years often bring their company (or a part thereof) with them. Most of them plan to leave again within a few years, but the Dutch tax position on departure is rarely reviewed at the start of the stay.

A shareholder with a substantial interest (generally 5% or more of the shares) who leaves the Netherlands is normally taxed on the increase in value of the shares during the Dutch stay. Payment is deferred, but the tax is recorded in a protective assessment that can remain open for as long as the shares are held. Dutch law contains an exception for people who come for a limited period, known in Dutch as the passantenregeling (passer-by-rule in English). This article discusses the conditions, the relevance of the exception from 2027 and the most common mistakes in applying it.

1. What does Dutch exit tax on shares normally involve?

Dutch residents pay tax on income from a substantial interest, broadly a holding of 5% or more in a company, in box 2. In 2026 the rate is 24.5% on the first €68,843 and 31% on the excess.

When a shareholder with a substantial interest stops being Dutch resident, the law treats the shares as sold at fair market value on the day of departure. [1] The tax on that deemed gain is not collected straight away. The inspector issues a protective assessment (conserverende aanslag) and payment is deferred. [2]

Deferral is subject to conditions. If you move outside the EU or EEA, for example to the United States, the United Kingdom or Switzerland, deferral is in principle granted only against security. For departures from 15 September 2015 the assessment is no longer written off after ten years; it remains open until the shares are sold or value is taken out of the company.

2. The exception for temporary residents: three conditions

The exit charge does not apply to a substantial interest in a company that is not established in the Netherlands, provided you leave within eight years of settling here and have not lived in the Netherlands for more than ten years in total in the 25 years before departure. [3] All three conditions must be met. If one fails, the normal exit charge applies in full.

1. The company is not established in the Netherlands

What it means in practice: A company is tax resident where it is effectively managed. A US Inc., UK Ltd or GmbH qualifies as long as it is genuinely run from abroad. A company incorporated under Dutch law, such as a BV, is always treated as Dutch for this rule, wherever it is managed. [4]

Where it typically goes wrong: The founder runs the company from a Dutch home office.

2. You leave within eight years

What it means in practice: The period starts when you become Dutch tax resident, not on the date of your 30% ruling decision or your municipal registration. Opting for partial non-resident status in your first years does not move the start date. [5]

Where it typically goes wrong: The period is counted from the wrong date.

3. No more than ten years in the Netherlands in the last 25

What it means in practice: Earlier Dutch periods count: studies, a previous posting, childhood years that fall within the 25-year window.

Where it typically goes wrong: Five earlier years plus six now makes eleven. The exception is lost although the current stay is shorter than eight years.

The test applies per shareholding. Someone who holds a foreign Inc. and also a Dutch BV can be exempt for the Inc. and still receive a protective assessment for the BV.

3. How the exception works with the step-up on arrival

A second rule applies on arrival. When you become Dutch resident, the acquisition price of your shares is set at their fair market value on that date, unless you have lived in the Netherlands before. [6] Growth in value before your arrival is therefore outside the Dutch tax base.

As a result, the Netherlands taxes a temporary resident only on dividends received and shares sold during the stay. Growth that is still unrealised on departure is not taxed in the Netherlands. A shareholder who stays longer than eight years is taxed on that growth through the protective assessment.

Acquisition price on arrival

Leaves after more than eight years: Fair market value on arrival

Leaves within eight years: Fair market value on arrival

Dividends and sales during the stay

Leaves after more than eight years: Taxed in box 2

Leaves within eight years: Taxed in box 2

On departure

Leaves after more than eight years: Deemed sale; protective assessment on growth since arrival

Leaves within eight years: No deemed sale

Moving outside the EU/EEA

Leaves after more than eight years: Security required for deferral

Leaves within eight years: Not applicable

Later sale abroad

Leaves after more than eight years: Dutch assessment becomes payable, in whole or in part

Leaves within eight years: Only the new country of residence taxes, under its own rules

Practical tip: document the value on arrival

The step-up on arrival only helps if you can support the value. For a private company without a recent funding round, have a valuation prepared close to your arrival date. It sets the base for any sale during your stay, and for the exit calculation if you end up staying longer than planned. We at Port Sight Tax regularly assist companies in their valuation.

4. Why the rule matters more from 2027

Until recently, the exception was of limited relevance to many expats with a 30% ruling. Holders of the ruling could opt to be treated as partial non-resident taxpayers, which kept their foreign shareholdings out of box 2. That option was abolished from 1 January 2025. Employees who already applied the 30% ruling in the last payroll period of 2023 can keep opting under transitional rules, but only until 31 December 2026. [7]

From 2027, every Dutch-resident expat with a substantial interest in a foreign company is therefore in box 2 on the same footing as other residents. Dividends are taxed in the Netherlands, with credit for foreign withholding tax under the applicable treaty, and departure triggers the exit charge. On departure, the eight-year rule is then the main remaining relief.

This is relevant for expats who opted for partial non-resident status. The tax authorities have confirmed that the eight-year period runs from the date you settled in the Netherlands, also if you opted for partial non-resident status in your first years. [8] Someone who became Dutch resident on 1 March 2019 must leave before 1 March 2027 to qualify. Any years during which partial non-resident status applied also count towards this period. The 30% ruling lasts at most five years. Someone who stays more than three years after the ruling has expired will therefore usually fall outside the eight-year period.

Related reading: Relocating to the Netherlands as a US citizen: a tax and immigration guide.

5. Worked example: a US founder who leaves after six years

A US founder owns 100% of a Delaware Inc. that is managed in the United States. She has not lived in the Netherlands before. She moves here on 1 March 2024, when the shares are worth €1,000,000, and returns to the United States on 1 March 2030, when they are worth €4,000,000. No dividends are paid during her stay. We use the 2026 box 2 rates for illustration; the rates for 2030 are not yet known.

Acquisition price on arrival (step-up)

Without the eight-year rule*: €1,000,000

With the eight-year rule: €1,000,000

Value on departure

Without the eight-year rule*: €4,000,000

With the eight-year rule: €4,000,000

Deemed gain on departure

Without the eight-year rule*: €3,000,000

With the eight-year rule: nil

Box 2: 24.5% on €68,843

Without the eight-year rule*: €16,867

With the eight-year rule: –

Box 2: 31% on €2,931,157

Without the eight-year rule*: €908,659

With the eight-year rule: –

Protective assessment

Without the eight-year rule*: €925,525

With the eight-year rule: none

Security (moving to the US, outside the EU/EEA)

Without the eight-year rule*: Required for deferral

With the eight-year rule: Not applicable

Amounts are rounded to the nearest euro; the total is calculated before rounding.

* For example because she stays longer than eight years, or holds the shares through a Dutch BV.

Under the eight-year rule she receives no protective assessment of about €925,500 and does not have to provide security. A government proposal of 29 September 2026 to lower the higher box 2 rate to 29.2% for 2027 to 2030 would reduce that assessment to roughly €872,800 if it is enacted. Under the eight-year rule the outcome would remain nil.

The outcome is different if she had set up a Dutch BV in 2025 and contributed the Inc. to it, her substantial interest would sit in a company established in the Netherlands. On departure in 2030 the BV shares would trigger a protective assessment on the growth during her stay.

US tax consequences

The eight-year rule only removes the Dutch claim. As a US citizen, the founder remains subject to US tax on a later sale. How the United States treats that gain, and how Dutch tax on dividends or sales during the stay interacts with the US foreign tax credit, is a question for a US tax adviser. Port Sight Tax does not advise on US tax law. We work with US partner firms and are happy to refer you.

6. Five ways to lose the exception

In our view, the main risk lies in the tax residence of the foreign company.

Management moves with you: You run your Ltd or Inc. from the Netherlands.

Consequence: The company can become Dutch tax resident. It then pays Dutch corporate income tax, the exception no longer applies to your shares, and the Netherlands can keep taxing them after you leave.

How to avoid it: Keep board decisions and key management demonstrably outside the Netherlands. For a company with one director, this requires board meetings and decision-making that actually take place abroad. Check how the relevant treaty allocates the company’s residence.

A Dutch holding is added: A BV is placed above the foreign company during the stay.

Consequence: A BV is always treated as Dutch. A protective assessment arises for that interest.

How to avoid it: Weigh the benefits of a Dutch holding against the exit cost before setting one up if you expect to leave within eight years.

The period is counted from the wrong date

Consequence: The period starts on the day you became Dutch resident. One day over eight years means the full exit charge.

How to avoid it: Record the start date of your Dutch residence and plan your departure against it.

Earlier Dutch periods are forgotten

Consequence: Studies or an earlier posting count towards the ten-year limit and can exceed it.

How to avoid it: Map your residence history over the full 25 years at the start of your stay.

You leave a little late

Consequence: There is no pro rata relief. A delay of weeks brings all growth since arrival into charge. Your tax departure date also depends on the facts, not on deregistration.

How to avoid it: Build a margin into the move. Make sure your Dutch home and ties actually end before the deadline.

Related reading: Dutch holding companies and PFIC considerations for US entrepreneurs.

7. What the rule does not do

The rule only removes the Dutch exit charge. Your new country of residence taxes a later sale under its own rules, and the United States taxes its citizens wherever they live. Dividends you receive and shares you sell while Dutch resident remain taxable in box 2.

The rule also only concerns substantial interests. A holding below 5% generally falls in box 3, where no exit charge applies in the first place. Before relying on the rule, confirm how the Netherlands classifies your foreign entity: a US LLC, for example, is not automatically treated the way it is in the United States.

8. Our view

Combined with the step-up on arrival, the eight-year rule allows a founder to build up value in a foreign company while living in the Netherlands and to leave without Dutch tax on that growth. We consider this defensible. It is consistent with the original purpose of the rule and with the Dutch interest in attracting senior people for fixed-term assignments.

Our criticism concerns the design. The rule contains no proportional element. A founder who leaves after seven years and eleven months is not taxed on the growth; a founder who leaves two months later is taxed in box 2 on all of it, including the growth of the first seven years. The inspector has no discretion to take the circumstances into account. The departure date should therefore be planned from the moment of arrival.

Most people know roughly when they will leave, so the deadline itself is usually manageable. The greater risk is the tax residence of the company. A founder who continues to manage a small Inc. or Ltd from a home office in the Netherlands risks the company becoming Dutch tax resident, in which case the exception no longer applies. A second risk is a Dutch holding company set up for other reasons, such as dividends or reinvestment. For a temporary resident, that holding brings back the exit charge for that interest. For clients who expect to leave within eight years, our starting point is to keep the foreign company in place, keep its management demonstrably abroad, and decide whether dividends should be taken during the stay or after departure.

9. Frequently asked questions

Related reading: Tax residency in the Netherlands and what a residence audit involves.

How Port Sight Tax can help

We advise founders, executives and investors who move to or from the Netherlands with an international shareholding. For temporary residents we are usually involved at two points.

On arrival we confirm whether your shareholding qualifies, document the step-up value, and review where your company is managed and how its governance should be organised while you live here. Where you still qualify for partial non-resident status until the end of 2026, we look at what ending it means for your exit position.

Before departure we carry out a pre-departure review. We test the three conditions against your actual dates and residence history, check the company’s place of effective management, plan dividends and the departure date, and prepare your final Dutch tax return. Where US tax is involved, we coordinate with your US adviser or refer you to one of our US partner firms.

Planning to leave within the next two years, or recently arrived with a foreign company? Contact us for an exploratory call.

Contact Richard Bierlaagh, Tax Partner.

Disclaimer: This article provides general information and does not constitute legal or tax advice. The outcome in your situation depends on your individual facts and on the position of the Dutch tax authorities. Port Sight Tax does not advise on US tax law. Please contact a tax adviser before acting on this information.

Sources and legal references

1. Art. 4.16(1)(h) Wet inkomstenbelasting 2001 (Dutch Income Tax Act 2001, "Wet IB 2001").
2. Arts. 2.8 and 2.9 Wet IB 2001 (protective assessment); art. 25(8) Invorderingswet 1990 (deferral of payment, security). The ten-year write-off was abolished for departures from 15 September 2015.
3. Art. 4.18 Wet IB 2001.
4. Art. 4 Algemene wet inzake rijksbelastingen (place of residence determined by the circumstances); art. 4.35 Wet IB 2001 (a company incorporated under Dutch law is deemed to be established in the Netherlands for these rules).
5. Belastingdienst knowledge group standpoint KG:003:2024:7, https://kennisgroepen.belastingdienst.nl/publicaties/kg00320247-aanvang-achtjaarstermijn-artikel-4-18-wet-ib-2001-bij-partieel-buitenlandse-belastingplicht/
6. Art. 4.25(1) and (2) Wet IB 2001.
7. Art. 2.6 Wet IB 2001 (old), abolished as of 1 January 2025; transitional rules for employees who applied the 30% ruling in the last payroll period of 2023 run until 31 December 2026.
8. Knowledge group standpoint KG:003:2024:7 (see note 5).
9. Art. 4.25(2) Wet IB 2001; art. 16 Uitvoeringsbesluit inkomstenbelasting 2001.