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Dutch tax FAQ – get up to speed!

Everyone who comes to work in the Netherlands or run a business here certainly has their own particular tax situation with its own advantages, challenges and peculiarities.

For instance, does the newly-arrived expatriate employee qualify for the 30% ruling? Is the keen foreign entrepreneur meanwhile looking at a business opportunity in Amsterdam, for example, really au fait with fiscal Holland? Or do you just find yourself needing good tax advice from someone who above all knows what they are talking about? Hopefully, our Dutch tax FAQ will help to clarify matters.

So... do you need a Tax Trouble­shooter, for example?

We at OrangeTax realise that tax is a complicated issue, certainly for the non-Dutch expat or entrepreneur. And moreoever the only definitive arbiter is the Dutch Tax Office

As a result, we drew up these Dutch tax FAQ sections to give you some general orientation in the field. The Tax Troubleshooting FAQ for example covers some more unusual areas, certainly, but it may be just what you need. Use the yellow hamburger menu on the right to jump further to the section that interests you above all and off you go. This Dutch tax FAQ only goes so far, of course so if you need to contact us, you certainly know where we are.

Payroll FAQ

If you miss the June 1 deadline, the Dutch tax office will send you a reminder. The Dutch tax office issues a penalty of EUR 5,514 if you are too late therefore the reminder is indeed very urgent. Moreover, as regards the extension, you can’t get one if they have already sent the reminder to you. The application for the extension has to be submitted before the first deadline (June 1).

There is a requirement in the accounting rules that you submit your publication report to the Chambers of Commerce within max 12 months from the end of the financial year. The Chambers of Commerce may issue a penalty though this is rarely done. The actual penalty is that if the publication report is not completed, or not in time, the board of directors are held personally liable for any case of bankruptcy which may occur.

Firstly, in order to pay a dividend, a company needs to have a positive general reserve. Before a dividend is set, the salary of the director shareholder therefore needs evaluating. If that salary was too low, it needs adjusted as a result. However, if a positive reserve is still left over and if the dividend does not cause the company liquidity issues in the near future, we can assist you with the dividend procedure and tax filing.

If you meet the criteria of the 30% ruling, then you certainly can get or continue the 30% ruling with your own BV company.

If you properly processed the bookkeeping, certainly. Properly implies no two dimension Excel overview, but the three dimensional bookkeeping program. And you have taken all aspects into account such as payroll, Value Added Tax filings. Then we can file the corporate income tax return for you.

In short, yes we can certainly assist you with the liquidation. The procedure we need to take depends on the outstanding debts the BV company has. If we meet all the tax obligations, it can result in a turbo liquidation.

Corporate/Business FAQ

You should certainly start by registering your one-man company, which is a tax-transparent company, with the Chamber of Commerce. The Chamber of Commerce will subsequently update the Dutch tax office. After that, the Dutch tax office will send you messages and notifications. That’s the time you contact us!

Yes you can, and the day it is registered it will have to pay tax like a regular Dutch BV company. Therefore you may qualify for the 30% ruling if you meet the relevant conditions.

So if you meet the conditions of the 30% ruling, you can have the 30% ruling. On the other hand, the fact that you are the shareholder of the BV that is employing yourself does not affect your rights to the 30% ruling, so therefore yes, you can apply for the ruling.

No. However, you can deduct mortgage interest, study costs and charity donations. If you feel you are entitled to deduct some work-related costs, then the tax office will subsequently advise you to ask your employer for reimbursement.

This is a tricky question because banks certainly make it very difficult or impossible for companies where the shareholder is not a Dutch tax resident. However, for companies where the owner and/or director is a Dutch tax resident, opening a bank account should not, in conclusion, be a problem.

The minimum is EUR 0,01 –  however, since you cannot purchase anything for EUR 0,01 we recommend that you add up the initial expected costs before you make a turnover and consequently use that amount as share capital.

The notary does and we would certainly happily assist you in the process.

You need to enter the decision in the minutes of the shareholders’ meeting, then update the books after that according to the Chamber of Commerce procedures, and if all goes well, two months later the BV will be liquidated.

Yes you certainly can.

This depends on whether your partner actually carries out work for the company. If so, then you can.

Income tax (personal) FAQ - General

That depends on the particular situation – however, if you only had salary income in the Netherlands – and have less than roughly EUR 30,000 in assets per person – there is no need to file a tax return.

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

You have to file the annual income tax return between 1 March and 1 May of the following year, so consequently the 2022 annual income tax return is due between 1 March and 1 May 2023.

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

In short, your colleague’s tax situation is very likely not the same as yours, even though you work for the same company. The refund is based above all on your own personal situation. For example, do you have children, do you own your own house with a mortgage, did you have study costs, etc. Therefore, you have to handle each situation as an individual case.

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

  • Income from employment (Box 1)
  • Any income from pension (Box 1)
  • Income from your own company (Box 1)
  • All income from alimony (Box 1)
  • Primary residence and likewise 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 however 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 most importantly you have to file in the year of migration. However, you can only file this manually via the form provided. We can subsequently 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 moreoever takes into account estimates and forecasts. So this results in a monthly refund from or payment to the Tax Authority.

The annual income tax return on the other hand 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. After that, the outcome of the preliminary assessment and the annual income tax return of the same year are therefore settled against each other. The annual income tax return subsequently results in a one-time refund or an assessment amount to be paid.

If you combine more than two jobs, it is certainly 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 it, you automatically pay too little tax as a result. You subsequently have to pay back tax when you file your income tax return.

Income tax (personal) FAQ -30% ruling

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

In short, both the employer and the employer make the appication jointly. However, if your employer has no preference regarding who applies for the ruling, we will certainly be happy to assist for a fixed fee of EUR 605 incl VAT.

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

They will tax you 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.

In short, 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 subsequently need to meet the regular – higher – minimum salary. If on the other hand you do not meet it, you immediately lose your claim to the ruling forever.

Income tax (personal) FAQ - Tax Partners & Family

Yes you do, because as a result you and your tax partner can share between you things like mortgage interest deduction, study costs deduction, or moreover taxable assets etc. We are aware that the larger tax advice companies for instance only offer to do your partner’s tax return as part of an expat package. That is certainly not a joint return. So if that is the case, we are certainly happy to do your return without your partner. Our fixed fee is EUR 430 incl VAT.

  • you are married
  • both of you are of legal age and consequently 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
  • both of you are of legal age and one of you meanwhile has a minor child (<18 years old in NL) registered at your address

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

If you work in the Netherlands you therefore pay income tax in the Netherlands. If your spouse is not working, then your spouse is probably entitled to a refund as a result of you working. There is a minimum income requirement, but for example if you earn more than EUR 10.000 annual salary, your spouse can most importantly get a full refund.

To sum up, 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 as you can therefore allocate your assets and deductible costs in the most beneficial way. However, if you are not on speaking terms, you might want to file separately, certainly this is also possible. If there is no established allocation of the assets and deductible costs, however, each of you will claim 50%.

In short, no, this is not tax-deductible.

Yes, this is certainly tax-deductible.

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

Income tax (personal) FAQ - Deductible Costs

You can deduct the mortgage interest and moreover 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 certainly 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 as a result. Please note, that these costs above all 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. Similarly, you can use the A factor to determine your ‘retirement reserve’ if your employer has also paid pension. If you have not meanwhile used the retirement reserve from previous years, you can also use it if there is too much pension to deduct.

To clarify, deductible costs lower your taxable income.

If you work for an employer for instance, 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 consequently taken into account, lowering your taxable income. However, your employer has meanwhile withheld the wage tax over the income without deductible costs. This means that your employer has withheld more tax then you should have paid as a result, so you can expect a refund. Please note, that in this example we have assumed that the employer has meanwhile 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 as a result so less tax will be due.

Income tax (personal) FAQ - Assets

Your assets consist of your savings, your investments, a second Dutch house and in addition any 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 in conclusion to do with having an owner-occupied home. So the bottom line is that home owners pay for the enjoyment of living in their house. This enjoyment is therefore seen as income in kind. The amount is consequently 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. To clarify, the Netherlands does not have capital gains tax, only capital tax.

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

This depends. Are you for instance free to withdraw from the account at any point? In this case it is certainly 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 therefore 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, for example, that properties are taxed in the country they are located in, so they are exempt from Dutch taxes. They do however have to be declared if you are not entitled to the 30% ruling.

Say you own a second house in the Netherlands and in addtion your daughter is going to study in Groningen. So your daughter is going to live in the second house with fellow students. Therefore you rent out another house which is not your owner-occupied home. If you rent out your second house, you subsequently 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, for instance, 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 however 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, however, if you are doing this for a living.

No, in short this is not taxed in the Netherlands.

Income tax (personal) FAQ - American Tax

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

Yes and this will therefore 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, therefore double taxation relief will be applied over this income in the Netherlands.

Income tax (personal) FAQ - Miscellaneous

To sum up, this will be taxed according to the tax rules of the country of the deceased person.

In short, this will be taxed according to the tax rules of the country of the giver.