Various taxes apply to everyone in the Netherlands. The Dutch tax system, especially for internationals, may not be that simple.
For purpose of application of the tax laws, it is important to know whether you are a resident in the Netherlands or not. If so, you are considered as a 'resident taxpayer'; if not, as a 'non-resident taxpayer'.
However, non-residents can request to be treated as resident taxpayers. In addition, if you are benefiting from the 30% ruling, you may opt to be treated as a partial non-resident taxpayer.
Additional information, such as personal situation (i.e. non-working partner), other assets and earnings, might be taking into consideration.
Are you a resident?
Under Dutch law, the question of a person's residence is determined according to the situation:
- The place where you have your home
- The place where your family (partner) resides
- The place where you work
- The lengh of your stay in the Netherlands
- Other personal ties with the Netherlands, such as (club) memberships, bank accounts, etc…
The Netherlands Tax System
Different categories of income are treated differently for tax purposes on the tax return and there are three types of taxable income:
- Box 1: Income from profits, employment and home ownership. This includes wages, pensions, social benefits, company car, and WOZ value of owner-occupied property (max. 52%)
- Box2: Income from substantial shareholding (5 percent minimum holding).This income is taxed 25%.
- Box 3: Taxable income from savings and investments. Income from property for instance, owned but not lived in as a main residence, is taxed here: not the actual income but the value of the asset (fictitious return: 4% taxed at 30% = 1.2 %).
Where possible, partners are taxed individually but, when only one partner works, the other partner is generally entitled to a refund of general tax credit and deductible expenditure can be apportioned to take advantage of tax credits. Please note that the conditions for unmarried couples to qualify as a partner have been changed as of 2011.
Instead of personal allowances, Dutch tax law contains levy rebates; rebates on tax and on the so-called general insurance contributions. Various levy rebates are available, depending on your personal situation.
Find more information on tax, tax refund and double taxation at the Tax and Customs Administration - the Belastingdienst : www.belastingdienst.nl/english
Practical tips on how to file your taxes: www.iamsterdam.com/en/living/official-matters/finance/tax-time
The word 'wage' includes cash benefits, benefits in kind, and also entitlements (such as pensions). In general, the employer is required to deduct the wage tax due from your wages and pay it to the Tax Office. The amount thus deducted can later on be credited with the income tax due. In some case, no tax bill is imposed and thus payroll deduction is the final tax due.
The Netherlands wage tax law provides cost allowances for both resident and non-resident taxpayers:
- Cost allowances: allowances for all kind of expenses, the (non) taxability of which is determined by the business or personal nature of the expenses; the same applies to income in kind.
- 30% - ruling: This is a tax incentive for employees, recruited from abroad who bring specific skills to theNetherlands. It acknowledges the additional expenses incurred by expats (extraterritorial costs) by allowing the employer to grant a tax-free lump sum to cover these costs up to a maximum of 30% of the sum of wages and allowances. Applications (completed by both employer and employee) should be made to the Belastingdienst Limburg Kantoor Buitenland in Heerlen. The conditions for qualifying for the 30% ruling are set to change in 2012 to be more relevant to the intended focus group.The amendments will be published in the Dutch Government's 2012 Taxation Planand will apply as of 1 January 2012
Individual Tax Advisors:
Financial Consultants De Boer - www.fvbdeboer.nl
J.C. Suurmond & zn Tax consultants - www.jcsuurmond.nl/en/introduction.html
Crowe Horwath International - www.crowehorwath.net
Expatax BV - www.expatax.nl
Finsens - www.finsens.nl
Taxpat BV - www.taxpat.com
Total Compliance and Outsource BV - www.totalcompliance.nl/?page=introductie&lang=eng
Corporate Tax Advisors:
Briddge - www.briddge.com
Deloitte - www.deloitte.com/view/en_GX/global/index.htm
Ernst & Young Belastingadviseurs LLP - www.ey.com
PricewaterhouseCoopers Belastingadviseurs N.V. - www.pwc.com
Tax authority website. Information in English. Separate offices for resident and non-resident taxpayers, no email queries.
TaxLine: 0800 0543.
Central information line for residents (Dutch spoken).
Mon-Thurs 0800-2000, Fri 0800-1700.
Information line for non-resident taxissues: 055-538 5385 or +31-555 385 385
For businesses/individuals abroad liable for Dutch tax, plus non-residents for tax purposes.