Wage tax and income tax have tax reductions. These tax reductions (labor, elderly and general tax reductions) consist of a tax component and a premium component.
- Residents of the Netherlands receive the full reduction, both the premium component and the tax component.
- Employees who are residents of a country in the EU or EEA, Switzerland or the BES Islands only receive the premium component of the tax reductions and in addition they also receive the tax component of only the labor credit.
- Employees from outside the EU, EEA, Switzerland or the BES Islands only receive the premium part of the tax reduction.