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FAQ – Individual Expats

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Dutch tax return and more - Dutch tax FAQ for expats in the Netherlands

The Dutch tax return and other fiscal rulings can be daunting prospects for expats but it is important that – whoever you are and whatever your salary – you get things sorted asap in order to avoid paying extra tax you do not need to.

Dutch tax return, 30% ruling, and much more…

As an expat in a new country, there is a lot to do before you even think about the Dutch income tax return. When you do, OrangeTax will be glad to help you but why not check out a few facts first so you will have an idea of what is what before you contact us.

General

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That depends on the situation but if you only had salary income in the Netherlands – and have less than roughly EUR 30,000 in assets per person – no tax return needs to be filed.

You have to file a tax return when you are invited to do so or if you own a Dutch property. It is possible that you will not be invited to do so if you only have income from employment, however, it might still be beneficial to file in order to claim deductible costs. Feel free to reach out if you would like us to check.

The annual income tax return has to be filed between 1 March and 1 May of the following year, so the 2021 annual income tax return is due between 1 March and 1 May 2022.

We cannot know this without doing the necessary calculations. We require your full name, date of birth, BSN, address, income details and maybe some more things in order to calculate how much you might get back.

The tax situation of your colleague is very likely not the same as yours, even though you work for the same company. The refund is based on your own personal situation. For example, do you have children, do you own your own a house with a mortgage, did you have study costs, etc. Hence each situation has to be handled individually.

In general, the annual income tax return takes the following into account:

  • Income from employment (Box 1)
  • Income from pension (Box 1)
  • Income from your own company (Box 1)
  • Income from alimony (Box 1)
  • Primary residence and the mortgage relating to it (Box 1)
  • Other Dutch properties and their mortgage (Box 3)

(If you are entitled to the 30% ruling, the following items do not apply)

  • Worldwide bank accounts per 1 Jan of relevant year(Box 3)
  • Worldwide stocks/bonds per 1 Jan of relevant year (Box 3)
  • Real estate assets per 1 Jan of relevant year (Box 3)

This is the so called Migration form which has to be filed in the year of migration. You can only file this manually via the form provided, we can then file this digitally on your behalf. Feel free to reach out if you require assistance.

A preliminary assessment can be required during the year it relates to and takes into account estimates and forecasts. This results in a monthly refund from or payment to the Tax Authority.

The annual income tax return takes the same kind of information into account, only after the year has ended, so taking into account the actual figures instead of estimates and forecasts. The outcome of the preliminary assessment and the annual income tax return of the same year are settled against each other. The annual income tax return results in a one-time refund or an assessment amount to be paid.

If you combine more than two jobs, it is important to take into account the tax credit and employed person’s tax credit. These are schemes to pay less tax. If your employers both do, you automatically pay too little tax. You have to pay back tax when you file your income tax return.

30% Ruling

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Not really; the 30% ruling means that 30% of your gross salary does not get taxed at all. The 30% ruling also offers additional benefits like wealth tax exemption, exchanging your foreign driver’s license for a Dutch one, and tax exemption for international school fees.

This is made jointly by the employer and the employee. If your employer has no preference who applies for the ruling, we will be happy to assist for a fixed fee of €550 incl VAT.

Afraid not! Your partner is with you for love and that is not enough for the 30% ruling. They can only apply for the ruling if they were also recruited for a job of their own.

You will be taxed on your assets per 1 Jan of the relevant year for the part of the year that you are not entitled to the 30% ruling.

If you are less than 30 years old and you have a master’s degree, a lower minimum salary is applicable. However, the day you turn 30 you need to meet the regular – higher – minimum salary. If you do not, you immediately lose your claim to the ruling forever.

Tax Partners & Family

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Yes you do, because things like mortgage interest deduction, study costs deduction, or taxable assets etc, can be shared between tax partners. We are aware that the larger tax advice companies only offer to do your partner’s tax return as part of an expat package. That is not a joint return. If that is the case we are happy to do your return without your partner. Our fixed fee is €390 incl VAT.

  • you are married
  • you are both of legal age and have concluded a notarial cohabitation contract together
  • you have a child together
  • one of you has recognized a child of the other
  • you are registered with a pension fund as pension partners
  • you are both of legal age and one of you has a minor child (<18 years old in NL) registered at your address

One of the advantages of a joint tax return is that you can allocate deductible costs in the most beneficial way. We can also split the assets in the most beneficial way if you file jointly. Another benefit is that if you are not entitled to the 30% ruling, but your partner is, that when filing jointly, neither of you would have to declare their worldwide assets. Your partner may also qualify for the non-working spouse rule.

If you work in the Netherlands you pay income tax in the Netherlands. If your spouse is not working, then your spouse is probably entitled to a refund because you are working. There is a minimum income requirement, but basically if you earn more than EUR 10.000 annual salary, your spouse can get a full refund.

In the year of divorce you can choose whether you would like to be tax partners or not. Most of the time being tax partners is beneficial due to the fact that assets and deductible costs can be allocated in the most beneficial way. However, if you are not on speaking terms, you might want to file separately, this is also possible. If there is no established allocation of the assets and deductible costs, each of you will claim 50%.

No, this is not tax-deductible.

Yes, this is considered income and will be taxed according to box 1 tax rules.

Deductible Costs

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You can deduct the mortgage interest and some of the one-off financing costs relating to the purchase of the property.

If you are following a study to increase your job opportunity and you do not receive any form of compensation, they are deductible. Please note, you do have to pay the study costs yourself!

If your medical costs meet specific requirements and exceed the threshold, they are deductible. Please note, that these costs must not be covered by your insurance nor must they fall under the ‘own risk’ category.

Yes, you can. If you paid the pension premiums yourself because you have a pension deficit, you can deduct the premiums paid. If your employer has also paid pension, you can use the A factor to determine your ‘retirement reserve’. If you have not used the retirement reserve from previous years, you can also use it if there is too much pension to deduct.

Deductible costs lower your taxable income.

If you work for an employer, your employer will withhold some of your income to pay due tax. Your employer does not take into account your deductible costs. When filing the tax return, the deductible costs are taken into account, lowering your taxable income. However, your employer has already withheld the wage tax over the income without deductible costs. This means that your employer has withheld more tax then you should have paid, so you can expect a refund. Please note, that in this example we have assumed that the employer has withheld the correct amount of wage tax on the income without deductible costs – however this does not always happen.

If you run a one-man business, your deductible costs will also lower your taxable income so less tax will be due.

Assets

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Your assets consist of your savings, your investments, a second Dutch house and other world-wide real estate assets minus debts.

The home ownership tax or eigenwoningforfait is an extra tax on top of your income tax and has to do with having an owner-occupied home. The bottom line is that home owners pay for the enjoyment of living in their house. This enjoyment is seen as income in kind. The amount is determined on the basis of the house’s value. The value used for this is the so-called WOZ-value.

No, your assets are taxed as per 1 Jan of the relevant year. The Netherlands does not have capital gains tax, only capital tax.

No, RSUs are considered income and are taxed when vested as income in box 1.

This depends. Are you free to withdraw from the account at any point? In this case it is considered an asset and it will be taxed according to box 3 tax rules. If there is an age restriction on the account, then it is considered income once you obtain money from the account and it will be taxed according to box 1 tax rules.

In most cases, the Netherlands has a tax treaty with the other country. The tax treaty usually states that properties are taxed in the country they are located in, so they are exempt from Dutch taxes. They do have to be declared if you are not entitled to the 30% ruling.

You own a second house in the Netherlands, your daughter is going to study in Groningen. Your daughter is going to live in the second house with fellow students. You therefore rent out another house which is not your owner-occupied home. If you rent out your second house, you do not have to declare the rental income. However, you must state the value of the house on 1 January as the value in box 3. If you have a loan on the house, you can also state the loan in box 3, the loan will reduce the value of the house so the tax will also be reduced! You may not deduct the mortgage interest or one-off financing costs for a second house.

No, in most cases, this is not taxed in the Netherlands. It can be taxed if you are doing this for a living.

American Tax

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No, IRA and 401K will be considered income if you receive money from the account. This will be taxed according to box 1 tax rules.

Yes and this will be taxed according to box 3 tax rules.

The 401K is not part of your Box 3 wealth tax.

Yes, this has to be declared but it is taxed in the US, hence double taxation relief will be applied over this income in the Netherlands.

Miscellaneous

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This will be taxed according to the tax rules of the country of the deceased person.

This will be taxed according to the tax rules of the country of the giver.

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