INTRODUCTION TO DUTCH INCOME TAX RETURN
If you are resident in the Netherlands you have to pay tax on your worldwide income. If you are not a resident, but you do have income from Dutch sources, you have to pay tax on this income in the Netherlands. Although the Dutch tax administration (belastingdienst) already know a lot about your income, you are either obliged to, or it is wise to file an income tax return. This way, the correct amount of personal income tax is calculated. This may lead to an amount of tax payable or refundable.
If the tax return leads to an amount of tax payable that is more than € 45 you are obliged to file a tax return. If you are invited to file a tax return, it means that you are obliged to file regardless of the outcome. The tax return may also lead to a tax refund, and then filing the tax return is the only way to claim this tax refund. Even if the tax return leads to an amount payable of € 45, it may be wise to file the tax return to inform the Dutch tax administration of this so that they will send you a final tax return of zero tax payable.
If you have a Dutch employer, your employer will withhold payroll tax on your salary. Sometimes the withheld amount is too high, and you can claim a tax refund. Sometimes it is also too low and you have to pay tax. Besides normal mistakes, reasons why the withholding may be different from your actual amount of income tax payable can be that you did not have the same amount of income every month, you got a raise, received a bonus or you did not work for the full year. Then there may be tax deductions or tax discounts that you can claim, or you may have to pay income tax on your property. Your employer will not take these into account when withholding your payroll tax, so you will have to file an income tax return. We would be happy to prepare and file your Dutch income tax return for you. Just contact us and we will help you.
Below you will find information about your income tax return for Dutch resident tax payers. Please contact us if you have questions about or need our help with filing an income tax return for non-resident tax payers. You can also contact us if you need help with filing an income tax return for the year of immigration to or from the Netherlands.
Dutch income tax return for resident tax payers
If you have a spouse or a partner, you can be tax partners and the Dutch income tax return can be filed jointly. In almost all situations this is an advantage. This is because you can divide some deductions among each other and if your spouse does not work, you can claim the so-called non-working spouse benefit. Please contact us if you want to know if you and your spouse/partner are tax partners.
Tax deductible items
There are a number of tax deductible items that you can claim. The most used one is the mortgage interest deduction. If you own and finance the house that is your primary residence, you can get a reduction of your income tax. This reduction is calculated on the amount of your mortgage interest, ground lease and other financing expenses in the tax year. The rules about this can get very complicated. Especially in the year you buy or sell your house, your income tax return will be a bit more complicated. If you have this or any other deductible item, it may be a good idea to request for a provisional tax assessment.
All tax deductible items that you can claim in your 2018 tax return are:
- Financing costs of your owner-occupied home (mortgage interest deduction);
- public transport commuting allowance;
- expenses for income provisions (such as payments for annuities or for disability insurance);
- negative income (losses) from work and home in previous years;
- maintenance you pay (e.g. alimony payments to an ex-spouse);
- specific non-reimbursed medical expenses;
- expenses for a temporary stay at home of seriously disabled persons;
- study expenses;
- expenses for a listed (monumental) building in the Netherlands or the EU;
- donations to charitable organisations;
- qualifying waived venture capital loans that originate from before 2011.
For 2014 and earlier, also expenses for supporting children younger than 21 years of age could lead to a tax deduction. You can still claim this for tax year 2013 and 2014.
Not just the tax deductible items matter. You may also be entitled to a tax credit. Every full year resident is entitled to the general tax credit. If you work, you are entitled to labour tax credit. If you do not work but your spouse does, you may be able to claim the so-called non-working spouse benefit, which actually also is a tax credit. If you have children and you work, you may be entitled to the income-related combination tax credit. There a number of other tax credits you can claim. You find the complete list below.
- general tax credit;
- single elderly person’s tax credit;
- labour tax credit;
- tax credit for green investments;
- income-related combination tax credit;
- young disabled person’s tax credit;
- elderly person’s tax credit;
- work bonus (tax year 2017 is the last year you can claim this).
Since 2015, the single parent tax credit and the parental leave tax credit have been cancelled.
Dutch income tax on savings and investments
In general, you are also taxable on the property you own. Not the actual income from your savings and investments is taxed, but a deemed income on the amount of your property that exceeds € 30,000 (or € 60,000 if you are tax partners, amounts are for tax year 2018). Normally, real estate ownership is also taxed this way. Sometimes however other rules apply. If you hold the Dutch 30% ruling, you may choose to be exempt from this tax. If so, only Dutch real estate is still taxable property.
If you are taxed on your savings and investments, foreign withholding taxes (such as foreign dividend taxes) may be credited against the income tax you owe on your savings and investments. Dutch dividend withholding tax can always be credited against the income tax you owe, besides if you hold the 30% ruling and you choose to be exempt on the tax on your savings and investments.
Self-employment, freelance income, foreign income and income from substantial shareholdings
Besides the above, you may also have self-employed, or freelance income that may be taxable here. And your income from abroad is taxable and should be declared in your tax return. Double tax relief should then be claimed, so that your income is not taxed in two countries at the same time.
If you own more than 5% of the shares (or a share class) in a company, you may be taxable on the dividends you received or the capital gains you realise when e.g. you sell your shares. If you hold the Dutch 30% ruling, you may not be taxable on your foreign substantial shareholdings. We can also help you in these cases.
It may be that your tax situation is a bit less usual. For example if you:
- have immigrated or emigrated during the year;
- are not subject to national insurance (social security) scheme, or only part of the year;
- bought and/or sold your house during year;
- have separated from your partner and you owned a house together;
- own foreign real estate;
- have unusual types of investments;
- have self-employed/freelance or other income;
- have foreign income;
- own a substantial shareholdings (e.g. >5% of the shares (or a share class) in a company);
- have paid or received maintenance payments (e.g. alimony);
- have paid life annuity premiums or disability insurance premiums;
- have other deductible items;
- have income from an international organisation such as UN, NATO, EPO, embassy or other;
- are a US national or green card holder with the 30% ruling;
- have another special tax situation.
If so, special rules may apply to you that you should take into account when you file your income tax return. Of course we can help you with this. Please request for a fee quote from us.
Filing deadlines for income tax return
Your income tax return should be filed in March or April. The filing deadline is 1 May. However, an extension can be obtained so that the filing deadline is extended to 1 October. If we help you file your tax return, the filing deadline can be stretched even further. Sometimes it is better to file before 1 May. This is when you expect that you have to pay a large sum of tax. If you file before 1 May, no interest is added to your income tax assessment. For these situations, it may also be better to request for a provisional tax assessment. The interest rate on tax you owe is 4%.
The above information and the information of its subpages is just to inform you in general about your tax return filing obligation and is in no way meant to be an advice of any kind. We therefore accept no liability of any kind, also if the above is not accurate (anymore).