Content of the Knowledge Group position
The Knowledge Group discusses the situation in which an employee (A) with a 30% ruling, who is married in a full community of property with B, opts for partial foreign tax liability.1 The question in that case is how the joint income components of Box III should be divided between the taxpayer (A) and his partner (B). In the example used by the Knowledge Group, the full community of property as of January 1, 2024, includes income from a substantial interest in a foreign company of €100,000, a bank balance of €800,000, and assets of a child of €100,000.
By opting for treatment as a partial foreign taxpayer, A is taxed for Box II and III in accordance with the rules of Chapter 7 of the Income Tax Act 2001, i.e. foreign tax liability. In the example outlined, this effectively means that A is not taxed in Box II or III. The joint income is entirely attributed to A in the joint tax return of A and B.
