Anonymous Dutch tax rate must sound exciting, as you are anonymous to the Dutch tax system. Or is it the other way around, not exciting at all?
Anonymous Dutch tax rate – what is that?
If you are an employee of a Dutch company, you need to identify yourself with that employer. And you need to provide your Dutch tax number (BSN) to that employer. If you lack one, the other or both, you are as employee anonymous.
What are the consequences?
The consequence of the employee being regarded anonymous is that the 52% tax rate is applied to the salary income. Ah, you think. They simply apply the highest tax rate. No. The highest tax rate is 49,5%, this rate exceeds the highest tax rate. See it as a penalty for not complying with the rules.
Besides the ridiculous 52% tax rate, no wage tax credits can be applied. The social premiums are calculated not taking into account the maximum amount over which these premiums can be calculated.
Can the anonymous rate be solved?
Often the employee receives the first salary specification and is horrified about the low net salary. When the employer explains that is caused by the employee not identifying him or herself, often the employee instantly identifies him/herself. Does that solve the issue?
No it does not. The rules dictate that a salary that was processed as being anonymous cannot be corrected at all. This is only different if the employee provided the applicable details in time to the employer, but in the administration of the payroll these details were not provided in time or processed in time. Then the salary can be corrected.
Can the too much wage tax be reclaimed in the income tax return?
In the income tax return the salary details including the wage tax collection are taken into account. That implies the 52% collected rate is set off against the regular tax brackets. The tax credits are also taken into account.
If in the end you do not pay too much tax, as the 52% is set off in the income tax return, there is no need to address the anonymous rate issue? Of course you need to solve this issue, as the social institute will also see you as anonymous. That implies no unemployment benefit for you, when this employment is terminated. The issue is solved by providing your employer with your Dutch tax number and copy of your identification.
Tax is exciting
We think tax is exciting. Some think that being anonymous in the Dutch tax system is a good thing. Unfortunately it is not. You need to have been identified by the employer and to provide your Dutch tax number for the wage tax and social premiums correctly be applies.