The 2017 income tax return – file now or never – what is that about? That is about securing a possible tax refund you have, or lose it forever.
2017 income tax return
In the Dutch tax system you can only go back maximum 5 years. That implies in the year 2022 you can file the 2021, 2020, 2019, 2018 and 2017 income tax return.
The moment the year 2022 is over, your possibility to file the 2017 income tax return has closed. Not possible anymore. The tax filing system is now fully digital. The portal to file a 2017 tax return is after January 1 next closed in such a manner, that is 2017 tax return will be rejected.
Why would you file now a 2017 income tax return?
Multiple reasons are to give to file the 2017 tax return. The basis is that you have not yet filed a 2017 income tax return and you were in the year 2017 a resident or non resident tax payer in the Netherlands.
A non resident tax payer implies you were not living in the Netherlands, but you did have a source of income in the Netherlands you need to report. The most common one is property you own in the Netherlands. Whether you rent it out or not, you need to pay Box 3 wealth tax over the value of the property.
Extreme change in income during a three year period
The situation could be that you have an extremely low income in one year, the next year extremely high income and then again an average or low income. Over the low income you pay low tax and you have not maximized the tax credits. Over the high income you paid the highest tax rate and the higher the income the lower the tax credits.
In the ideal world where the income of this three year period would be the average of this period, you would have paid less tax. The Dutch tax office would like to welcome you temporarily in the ideal world by offering to average out the income over exactly that period. A threshold is taken into account, but maybe you can claim tax back.
In order to be able to process this averaging out, of each applicable year a final tax assessment needs to have been imposed. Maybe for you the period 2017-2019 or 2018-2020 is interesting. However, if you have not yet filed the 2017 income tax return, you cannot have a final assessment for 2017. Therefore 2017 cannot be part of the averaging out the income calculations. Filing the 2017 tax return, even if the result is zero for that year 2017, opens the path to averaging out.
For migrant that arrived in 2017 or left in 2017 the averaging out the year 2017 is not possible.
Migrants arriving or leaving in 2017
Persons that left the Netherlands during the year or arrived, most likely can have a tax refund. The salary paid by your employer in the Netherlands was based on the assumption you would be a full year tax resident. Even if your employer was aware you were going to leave. Or even if your employer was aware you just arrived, the salary program cannot handle that.
If you leave or arrive the Netherlands you are not always invited to file a Dutch tax return. Even worse, if you left the Netherlands, but you have not provided your new foreign address, a tax return will not be taken into account. Only from the moment your foreign address details are known, the tax return is being process.
Have your 2017 migration income tax return filed. Or at least have us check if there is money to claim back.
Claim mortgage deduction
You would assume that person purchasing a home that becomes their main residence know about the tax refund. And people do know about the tax refund.
If you have experienced how it is to purchase a house in the Netherlands, you also know that his is a hectic period. The bank wants more information, the sale and purchase agreement is updated. You want a survey, seller gives you no opportunity. At the same time your employer demands your attention and your children want to play soccer with you.
It is possible that you purchase the house late in the calendar year. So late, that the first mortgage payments are charged only in the new year. If you only had employment income till the moment you purchased the house, probably you had no tax filing obligation. The tax office then send you no invitation to file.
You did pay the notary, the mortgage expert, the valuator for the costs of the transfer of the house. Paid late in the year, hence deductible only in that year. So you might have forgotten to file a tax return to claim this back.
Believe me, it does happen. And then you could say, you guys should notice that. No we do not. Maybe someone else helped them during that year with claiming back that tax.
Now or never claim back the purchase costs of your home paid in 2017, if you have not done that already.
Tax is exciting
We think tax is exciting. We are super excited to help you now claiming back income tax for 2017 at our fixed fee of EUR 410 incl VAT including tax partner for a regular income tax return. Sadness we share with you, when you ask us just after January 1 next to assist you with 2017. As that is too late.