A frequently asked question is about costs of employment. A person needs to wear a suit to work, or her hair needs to be done every week, or a mobile device is essential for performing on the job.
The basic rule is that you need to request your employer to reimburse these costs to you. If your employer is not willing to do that, the Dutch tax office certainly does not allow these costs to be deducted. Hence we have a system where you cannot deduct any costs of employment.
Costs of employment – schooling costs
The advanced tax filer shifts easily to the deduction for education. Costs for literature are provided, trips to courses taken out and other monthly subscriptions.
That is not correct either. Education costs are costs made during a period when tutoring was taken place, in which a teacher is guiding you and at the end you are examined about the contains.
Flight simulator costs and education costs
A pilot claimed in his 2012 income tax return costs for flight simulator training, medical check costs, headset, costs for renewal of his pilot license, dry cleaning costs, ipad and miscellaneous costs.
The tax office declined these costs. The pilot made an appeal and claimed that these are costs for education. The court ruled immediately that the costs of medical check, headset, renewal license, dry cleaning cost, ipad and miscellaneous costs are not education costs. Miscellaneous is basically never a deductible item, as it is not specified.
The flight simulator costs is an annual cost to check if his abilities as pilot are still up to date. The key for deductible education costs is that you are taught new information. Not a checkup of existing information. Hence the deduction of the flight simulator costs were declined as well.
Cost deduction in general
You might think the 52% tax rate is high, but it was only a couple of decades ago that we had the 72% tax rate as maximum tax rate. But under the 72% tax rate we had numerous deduction possibilities.
To simplify the tax system and to reduce the tax rates the deductions have been abandoned and the rate has dropped to 52%.
The plan for the future is to reduce the deduction even further by deleting the mortgage deduction from Box 1. That will take still many years to come, but by that time the tax rate should be reduced even more.
Orange Tax Services
We are not able to assist you with costs of employment, but we can assist you in claiming back education costs. Costs such as tuition fee, costs of books, costs of the examn and a limited number of other costs. There is a threshold of EUR 250 and a maximum amount of EUR 15.000 per tax year you can deduct. You are obliged to deduct the costs in the year you actually paid them. Hence, if your costs exceed the maximum, try to spread the costs over several years.