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2012 Dutch personal income tax return

Subject to Dutch personal income tax

The 2012 income tax return is due this year. Who needs to file this Dutch person income tax return? The persons who have received a request to file the income tax return, the persons who expect an income tax refund and the persons who know they have to pay income tax. How do you know you need to pay Dutch personal income tax? If you had two jobs in one year you most likely need to pay additional income tax. If your world wide assets as per January 1, 2012 exceed the tax free amount, income tax is due. If you earned free lance income or you had an other income source for which no wage tax has been withheld, income tax is most likely due.

Contents of the personal income tax return

The personal income tax return contains your world wide income such as salary, profit, freelance income, dividend income if you are a major shareholder any other type of income due to work done or services provided. Against the income can be off set a limited number of costs. Costs such as mortgage interest and a limited number of purchase costs of the house that is the main residence of the tax payer. Study costs, illness costs, charity donations. The afore mentioned costs are limited in their deduction by a threshold that varies based on the income. Only the study costs threshold is fixed by EUR 500 and maxed by EUR 15.000 annually. Private pension payments can be tax deductible as well, with a stress on can. Besides income the world wide assets need to be provided if a threshold of EUR 21.139 per tax payer is exceeded. The assets are balance on January 1, 2012. Debts can be reported as well, but there is a threshold to be considered that limits this deduction. We will be glad to assist you in verifying what is deductible/taxable and what is not.

Deadline of filing the income tax return

When should you file the income tax return? The income tax return needs to have been filed not later than the date printed on the tax return issued. That will be April 1, 2013. However, if a tax return is issued later in the year, then a later deadline than April 1, 2013 will be printed on the form. If you cannot meet the deadline, then you can ask yourself for an extension in filing, as long as the deadline has not already passed. The extension is about 5 extra months. If case you need a longer period, then please contact us and we can apply for an extension till March 31, 2014. If you know you need to pay income tax and no income tax return has been issued to you during the first six months after the tax year has ended, they you are obliged to request for a tax return to be issued to you. If tax is due over freelance income, wealth tax or other income, a tax return can be created digitally and filed. If the tax is due over profit of a company registered with the chambers of commerce a tax return does need to be requested for, as a self created tax return can then not be processed. When you are too late with filing the personal income tax return, a penalty is automatically issued to you. It starts with about EUR 220 and increases if you missed the deadline more frequently. There is basically not reason why on appeal this penalty should be reduced to nil. Too late it too late for the tax office and it turns out to have become an interesting source of income.

File before April 1, have the assessment before July 1

Why should you not request for an extension for the filing of the income tax return? As nice as it may seem to wait with filing your income tax return, there is a substantial downside to filing late within the extension period. The downside is the time frame. There is a rule and the rule is ‘ if filed before April 1, you receive the assessment before July 1’. When you do not file before April 1, the tax office can take three years to process the assessment and if you contact the tax office to inquire about the status of the tax return, this is exactly the answer you will learn. Not only you do not know when the assessment will be issued to you, and it can indeed take more than 2 years, you pay interest over the outstanding amount during this period. If you know how much you need to pay, you can already ask for a preliminary assessment and pay this amount, to avoid a substantial amount of interest to be paid.

Emigration/Immigration

If you emigrated from the Netherlands, you might think you are far away from the Dutch tax office, and you chose not to file the income tax return. But is it wise? Most of the time it is not, as you can have a tax refund. Actually, it is not a tax refund, it is a refund or social premiums. Because the income tax and social premiums amounts are paid under the name of income tax, it is referred to as a tax refund. The social premiums due are maxed per month, it is rather complex to explain how the refund is created, but it has to do with leaving the Netherlands during the year and the maximum social premiums amount per month. For tax immigrants it works the same, also a tax refund as they have immigrated during the year, but the employer has withheld social premiums as if worked the full year in the Netherlands. That is because the salary software cannot take immigration/emigration into account. If you emigrate it is very important you deregister yourself from the Dutch registrar via the city hall of the town you live in. Please provide a solid forwarding address. These details are communicated to the tax office. You cannot contact the tax office about the fact that you emigrate/immigrate, as they fully rely on the details of city hall. Should you move while living abroad, inform us and we communicate this to the tax office. You can only have the tax refund, if the tax office is able to send you a immigration/emigration income tax return. This tax return is completed by hand (not digitally) and can only be send if your address details are known to the tax office.

Non residents

When are you a regarded a non resident tax payer from the Dutch tax point of view? You are a non resident tax payer when you are already a resident tax payer in another country. If you spend time in the Netherlands (living and working) you can only be regarded a non resident tax payer if your central point of live is abroad. Your central point of life is most of the time your family (partner, children). If you are single and you spend time in the Netherlands for living and work, you are always regarded a resident tax payer, even though you are registered as a resident tax payer abroad as well. The most frequent situation in which a person is regarded a non resident tax payer, is in the situation that real estate is owned in the Netherlands, while living abroad. Based on the tax treaties real estate is taxed in the country where it is situated. The real estate is taxed at the WOZ value. The WOZ value is the value the county determined the real estate has, presented to the owner on a yearly basis. Based on this value also local taxes are charged. The taxable value is reduced with the debt taken out to purchase the real estate. Over the balance 1.2% income tax is due, unless negative balance, then no tax is due nor refundable. If you have tenants in the house, then inform us about the rental income (not the costs) and we can investigate if the WOZ value can be reduced on the basis of a low rental income. That will reduce the tax burden. Short stay rentals with permit of the county are not only subject to Dutch personal income tax, but also need to file Value Added Tax returns and tourist tax forms. We can assist with the VAT returns.

Previous years tax returns

In the event you have tax deductible costs like mortgage costs of the house that is your main residence, schooling costs or another tax deductible event and you forgot to claim those costs in an income ta return, then you can still file the corresponding income tax return if a five year period has not expired yet. This is the case for all types of income tax returns.

Our 2013 rates are as follows:

We charge EUR 370 incl VAT for the filing of a regular income tax return. Tax partner is included.
We charge EUR 370 incl VAT for the filing of the non resident income tax return. Tax partner is not included, but in case of for instance real estate tax, only one partner needs to file.
We charge EUR 370 incl VAT for an immigration / emigration income tax return. Per person, tax partners are not included. The calculation of the possible tax refund is made free of charge.
We charge EUR 500 incl VAT for an entrepreneurs income tax return. Tax partner is included. If bookkeeping needs to be done, then this is charged at EUR 80 ex VAT per hour. An annual report is not required. We can also file monthly/quarterly/annual VAT returns
We charge nothing for the filing of a preliminary income tax assessment due to a house you purchased this tax year in the Netherlands and you would like to already claim the tax refund.

Orange Tax Services – Have a tax question? Contact Us. We will be glad to file your income tax return.

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