If you are living in a ‘new’ country the thought of having to sort tax matters out can feel like a pretty heavy burden. Especially in tax season with the tax return deadline of May 1st for the Dutch tax return 2016 coming closer your stress levels may be rising. The fact that most information and forms the Dutch Tax office provides are in Dutch does not help. What might help you is knowing that filing a Dutch tax return though, also if you did not receive a notification from the Dutch Tax office, can actually be profitable.
There are many tax deductions for expats which you can make use of. To save you time, money and effort you can seek advice of a tax adviser specialized in expat tax advice. This way you can also be sure that you are making use of all possible deductions applying in your personal situation.
How to gain maximum tax benefit
To give you a head start on reducing your tax liability here are some useful tips:
- Planning of tax advantages
This way you can optimize your situation by for example clustering expenses in one year or postponing or bringing forward investments. Think of:
- change of residency and employment
- education or training costs
- buying property
- financial support of children in education
- charity gifts
- and life insurance annuity payments.
- Take advantage or your marital or civil status
If you are married or living together it can be profitable to check out whether you can get any tax advantage from this. If one partner is not working you can see if the non working spouse deduction applies to you.
- Check if there is a chance you do qualify for the 30% ruling
If you are not under the 30% ruling it is worth the effort to find out if it would be applicable in your case. This is only the case if you did not live within 150 km of the Dutch border for at least 16 months before you signed the contract with your Dutch employer and your salary is at least € 3100 per month. Also with the 30% ruling good tax planning ahead and seeking expert tax advice is wise.
- Make sure you are aware of all tax liabilities
It is important to take notice of factors which can lead to Dutch tax liability and assessment on time to prevent tax claims plus interest and fines, like foreign assets and income.
- Make use of all sole trader tax breaks
If you or your partner are starting a business or already in business it is also a good thing to seek tax advice in an early stage. There are many tax breaks for the so called ‘eenmanszaak’ or sole traders, especially in the first 3-5 years. If your income is not that high yet it can be better to wait with officially starting a business and count the income generated as hobby or other income.
Which tax form do you need to file in your situation?
In the Netherlands there are several different tax forms. Here are some basics about when to apply which tax form.
If you have to file taxes for the year you have moved to the Netherlands you cannot file the tax return electronically, but you need to submit this on paper by 1 July. This is 2 months later than the deadline for electronic returns: 1 May. You can request for an extension though through your tax advisor.
There are two other tax forms that could apply to expats: the P-form and the C-form.
The P-form needs to be filed by resident taxpayers, i.e. if you live and work in the Netherlands, your worldwide assets will be taxed.
The C-form needs to be filed by non-resident taxpayers: people who do not live in the country, but have income or assets which are eligible for Dutch tax. If you are not able to file before 1 April, you can request an extension. An expat tax advisor can also do this for you.
The tax advisors of J.C. Suurmond & zn. Tax consultants have since 1986 helped many internationals with their taxes, leading to substantial tax refunds. One client we gained a considerable tax refund for recently exalted: “ It's true! The Netherlands have the best tax system God ever created ! ;). Or at least the best Tax advisors...”. We can help you file your return 2016 correctly and on time, but also your tax returns five years back. We also offer a free tax review to optimise your tax refund.