Few business owners move for tax reasons. Large American studies of tax returns show that rich people actually move less often than average, and that business owners leave even less often. Those who do respond to tax rates are mainly people with a profession they can practise anywhere, such as top athletes and inventors. And if you leave the Netherlands with your own private limited company, you take a tax debt with you.
In short
- Millionaires in the United States move less often than average. Only about 2% of their moves can be explained by differences in tax.
- Top athletes, inventors and foreign workers do respond strongly to tax. For them, work is not tied to one place.
- If you leave the Netherlands with a substantial interest, you receive a protective assessment. If you left after 15 September 2015, there is no longer remission after ten years.
About the research in this article: most studies come from the United States, Denmark, Spain and European football. The results apply to the groups studied there. They are a good indication for Dutch business owners, but not an exact prediction.
In this article
- Do rich people really move for a lower tax rate?
- Why do business owners stay where they are more often?
- Who does move for tax reasons?
- Do tax breaks work to attract talent to a country?
- What happens to your tax when you leave the Netherlands?
- Is an address abroad enough to pay tax there?
- What does the research say about your own decision?
Do rich people really move for a lower tax rate?
Rarely. A study of all Americans with an income of $1 million or more, covering 1999 to 2011, found that millionaires move to another state less often than other people. Each year, 2.4% of millionaires moved, against 2.9% of all taxpayers (Young et al., 2016). So the image of the rich business owner who packs his bags with every tax increase is not accurate.
The researchers used 45 million tax returns from the US tax authority. They also calculated what would happen if all states had the same top rate. In that case, about 11,000 instead of 11,250 millionaires would move each year. So only about 2.2% of moves had a tax motive (Young et al., 2016).
Tax does play a small role. If an average state raises its top rate by one percentage point, it loses about 23 of its more than 9,000 millionaires each year. Almost all of those tax moves also went to one state: Florida, which levies no income tax (Young et al., 2016). So tax flight exists, but on a small scale.
Why do business owners stay where they are more often?
Because owning a business ties you to a place. Among American millionaires, 2.0% of business owners moved each year, against 2.6% of millionaires without a business. In the population as a whole, the gap was even larger: 1.6% against 2.9% (Young et al., 2016). Customers, staff and a network do not move with you.
Family also keeps people in place. Of the millionaires, 90% were married and 50% had children at home. Married millionaires moved half as often as single ones: 2.2% against 4.1% a year (Young et al., 2016). The researchers call this embeddedness: if you have become successful in a place, you have a lot to lose there.
A review of the research on tax and migration reaches the same lesson. Mainly people with a high income and an occupation with little location-specific knowledge respond strongly to tax (Kleven et al., 2020). Location-specific knowledge is knowledge that is only worth a lot in one place, such as your customer base, your knowledge of the local market or your permits. A business owner often has a lot of it.
Who does move for tax reasons?
Mainly people who can do their work anywhere and who already work abroad. The clearest example is European football. A study of professional football players in 14 European countries since 1985 found that foreign players respond strongly to the top rate, and players in their own country much less (Kleven, Landais & Saez, 2013).
The researchers measure this with an elasticity: how strongly the number of players in a country changes when the share of their pay they keep after tax changes. For foreign players it was around 1. If they keep 10% more, about 10% more foreign players come. For domestic players it was around 0.15 (Kleven, Landais & Saez, 2013).
Inventors show the same pattern. A study using patent data from the United States and Europe since 1977 found an elasticity of about 0.03 for the best domestic inventors, and about 1 for the best foreign inventors. Inventors at multinationals responded more strongly. If their employer does a large share of its research in a country, they responded less (Akcigit, Baslandze & Stantcheva, 2016).
The lesson for a business owner is that the difference does not lie in being rich or poor. It lies in how firmly you are tied to a place. People who already live abroad or work for an international company move easily. People who are rooted in their own country are hardly guided by the rate.
Do tax breaks work to attract talent to a country?
Yes, they work well for foreign workers with a high income. In 1992, Denmark introduced a scheme under which new foreign workers with high pay paid a flat rate of about 30% for three years. Without the scheme, they paid around 55% on average. The scheme doubled the number of well-paid foreigners in Denmark, compared with foreigners who earned just too little for the scheme (Kleven et al., 2014).
The researchers compared foreigners just above the pay threshold of the scheme with foreigners just below it. The elasticity was between 1.5 and 2 (Kleven et al., 2014). The researchers call that a very large response.
Differences in rates also work within one country, but mainly for people who are moving anyway. In Spain, the regions have been allowed to set their own income tax rate since a reform. People who moved chose a region with a lower rate more often. The elasticity of the number of top earners in a region was around 0.85. Still, a higher rate brought the regions more tax on balance than they lost through people leaving (Agrawal & Foremny, 2019).
The Netherlands has a similar scheme: the 30% ruling, under which an employer may pay part of the salary of an employee from abroad as a tax-free allowance. From 1 January 2027, that allowance falls to 27% of salary and the income threshold rises. In 2026, 30% still applies (Ondernemersplein, KVK).
What happens to your tax when you leave the Netherlands?
The Netherlands settles up on what you have built up here. If you have a substantial interest (as a rule 5% or more of the shares in a private limited company), the Tax Administration treats your departure as if you were selling those shares. On the gain from this deemed sale, you receive a protective assessment (Belastingdienst). That is a tax assessment you do not have to pay straight away, but which remains in place.
For a substantial interest, that assessment is valid indefinitely. If you left after 15 September 2015, you get lifelong deferral of payment, but no remission after ten years. You pay (part of) the assessment when you sell the shares, when the company pays a dividend or when the business stops (Belastingdienst). If you move to a country in the EU or the EEA, you get the deferral automatically and pay no collection interest for that period.
The gain on the deemed sale falls in box 2, the box for income from a substantial interest. In 2026, the rate is 24.5% up to €68,843 and 31% above that (Belastingdienst, 2026). A company that has grown over the years can therefore lead to a large protective assessment. A lower rate in the new country does not change that.
You also receive a protective assessment on pension and annuity savings you have built up in the Netherlands. It usually applies for ten years. You do not have to pay as long as you follow the Dutch rules, but you do if, for example, you surrender your pension or annuity (Belastingdienst).
Is an address abroad enough to pay tax there?
No. Where you live is assessed by the Tax Administration according to the circumstances, as the law states (Article 4 of the General Tax Act). Registering at a foreign address is not enough for this. What counts is where your life really takes place.
That fits what the research shows. Family, business and customers are exactly the ties that keep people in place (Young et al., 2016). If you keep those ties in the Netherlands and only leave on paper, you run the risk that the Netherlands still sees you as a resident.
What does the research say about your own decision?
That tax rarely tips the balance for people who are rooted. How strongly people respond to tax differs by group, by country and by scheme. There is no fixed measure that applies to everyone (Kleven et al., 2020). So a figure about football players or inventors says little about a business owner with a company and staff in the Netherlands.
If you are considering leaving, you compare more than two rates. The tax you take with you when you leave counts, as does the value of your customers, your staff and your network in the place where you are now. The research shows that most business owners make that calculation and stay.
Sources
- Young, C., Varner, C., Lurie, I.Z. & Prisinzano, R. (2016). Millionaire migration and taxation of the elite: Evidence from administrative data. American Sociological Review, 81(3), 421–446. doi.org
- Kleven, H., Landais, C., Muñoz, M. & Stantcheva, S. (2020). Taxation and migration: Evidence and policy implications. Journal of Economic Perspectives, 34(2), 119–142. doi.org
- Kleven, H.J., Landais, C. & Saez, E. (2013). Taxation and international migration of superstars: Evidence from the European football market. American Economic Review, 103(5), 1892–1924. doi.org
- Akcigit, U., Baslandze, S. & Stantcheva, S. (2016). Taxation and the international mobility of inventors. American Economic Review, 106(10), 2930–2981. doi.org
- Kleven, H.J., Landais, C., Saez, E. & Schultz, E. (2014). Migration and wage effects of taxing top earners: Evidence from the foreigners' tax scheme in Denmark. Quarterly Journal of Economics, 129(1), 333–378. doi.org
- Agrawal, D.R. & Foremny, D. (2019). Relocation of the rich: Migration in response to top tax rate changes from Spanish reforms. Review of Economics and Statistics, 101(2), 214–232. doi.org
- Ondernemersplein (KVK), 30% ruling allowance for expats becomes 27% (in Dutch), accessed 14 October 2026. ondernemersplein.overheid.nl
- Belastingdienst, Protective assessment on emigration (in Dutch), accessed 14 October 2026. belastingdienst.nl
- Belastingdienst, Tax information 2026: substantial interest (box 2 rates, in Dutch). belastingdienst.nl
- General State Taxes Act (Algemene wet inzake rijksbelastingen), Article 4, version valid from 1 January 2026. wetten.overheid.nl