The tax year is nearly at its end and the question is whether you have already filed your 2018 income tax return.
2018 income tax return – Do I need to file?
The 2018 income tax return is due when you have been invited to file this tax return. It is possible that you are automatically taken into the delay system of a tax advisor you might have used in the past. That is the reason why you have not received any reminders. However, May 1 2020 this delay rule ends and if you were supposed to have filed, you will be reminded by then.
Ought to know
You are ought to know the legislation of the Netherlands. Most Dutch are not aware of the full legislation, let alone you the non Dutch. The rule states that if you know you need to pay income tax, you are to file your income tax return not later than two weeks after the deadline. The deadline is May 1, 2019. Hence by May 15, 2019 you should have filed your income tax return.
2018 income tax return – Ought to know, what is that about?
The Dutch tax rules state that you have to file an income tax return when you know you need to pay income tax. When do you know that you need to pay income tax? That is the case in the following situations:
Two employers in one year
You had two employers in one year. If you earned with one employer about EUR 20.000, you are in the first tax bracket. If you earned again EUR 20.000 with another employer, maybe while you had two jobs at the same time, this employer calculated the first bracket tax rate. In the income tax return these two are put on top of eachother and then you end up in the second tax bracket. Hence you are due additional income tax.
Source of income other than employment
In the event you had a company like a one man company or you performed services for which you had not registered a company, but these services are regarded a source of income, then you need to file an income tax return to report this income.
What could be a source of income?
If you for instance worked for a non EU company in the evening after you finished your Dutch employment during the day. This work has indeed become an income. You did not initially anticipated this to become a source of income and now it has, it needs to be reported in the income tax return.
Owning your own home
You need to file your tax return to claim the refund. If you already were paid out the refund on a monthly basis during the year, you still need to file the tax return as the tax office would like to check if what was paid to you was indeed correct. In the event you decide not to file nevertheless, the tax office will demand you to pay back whatever they paid to you and you get a penalty for not filing the income tax return.
Owning your own home is in fact a source of income, but as the costs of this income – the mortgage interst– often exceeds the income – percentage of WOZ value – , it is a negative source. Hence it will result in tax back or you pay less tax. In normal circumstances the tax office does not accept a constant negative source of income, then the source is referred to as a hobby. But in case of the home owner it is accepted.
World wide assets
If you hold a so called 30% ruling, you do not need to report your worldwide income. However, the exception to this rule is property owned in the Netherlands. As many persons invest in buy to led property these days, this is something that needs to be reported.
Others who do not have the 30% ruling or no longer have the ruling and that exceed the threshold for reporting the world wide assets, need to file an income tax return.
Migration income tax return
If you migrated to or from the Netherlands during the year, then the chance is that you are entitled to a tax refund. If you are not sure you can have a tax refund or at least a tax refund exceeding our fees, you can always ask us to check if you can have money back. But please stress the fact ‘check’.
The above list is not a limited list, there can be other reasons why you need to file an income tax return .For instance you received alimony payments for yourself, you had a 401K pay out in 2017 or an IRA distribution. Your Roth IRA value exceeds the threshold. Even if you own property abroad, which are not taxed in the Netherlands, you sometimes need to file an income tax return.
We can file that income tax return for you. Our fee is EUR 370 incl VAT. For entrepreneurs our fee is EUR 550 ex VAT. Feel free to contact us.