You may be putting it off, but time is running out. You’ve got until April 30 to hand in your annual tax return – or get someone else to do it for you. Here’s round up of things to think about.
1. Do you need help?
You can file your taxes on the Belastingdienst website using your personal DigiD number, and it is relatively straightforward if your financial situation is super simple. If you’ve switched jobs, bought a house or claimed lots of benefits, it might be a bit more complicated.
You also need to have been registered in the Netherlands for a complete tax year – January 1 to December 31 to file online. If you have not been here throughout 2018, you will have to file your tax return manually, by filling in a 59-page document (the M form) which is only in Dutch. In this situation, we’d definitely recommend you get help from the likes of Blue Umbrella.
2. What happens if you get it wrong?
You can make changes in an online filing, although it is not always easy. The tax office is pretty sympathetic to genuine mistakes as well. You can also ask a tax advisor to help you sort out the mess.
3 Do you have to file an income tax return at all?
If you received an invitation from the Dutch tax office to file your income tax, you are required to comply, even if you had no income. The letters are typically sent in the month of February so if you’ve chucked in the recycling bin, you can always look it up in the Mijn belastingdienst section of the tax office website – if you have that all important DigiD of course. And who knows, perhaps you will be entitled to a refund.
4 What if you are a new arrival?
Tax filing for the year you arrived in the Netherlands is different from filings for residents with a complete tax year. You become liable for tax the moment you arrive but you might find the tax office has a different date – such as the date you registered with your local council. The tax office should use the actual date you arrived, so if there is a discrepancy, let them know, via your tax advisor.
Please note that as a newcomer, you cannot use the online DigiD tax filing system. If you do, you will end up filling out the wrong form, as the system is designed for permanent resident tax payers. A tax advisor can help you get it right first time.
5 The 30% ruling
If you were recruited from outside the Netherlands and you meet the minimum taxable salary threshold of € 37,743 (2019), you might be eligible for the 30% ruling. This allows employers to pay staff 30% of their salary free of tax. The rules for benefiting from this tax break have become more complicated as of late, and a tax advisor can help you find out if you qualify. Find out more here
6 Worldwide income and double tax relief
Residents of the Netherlands and non-residential tax payers should report their entire worldwide income in their income tax returns. This worldwide income may include revenue which the Dutch tax office is not entitled to tax because of bilateral tax treaties.
To avoid a situation where you have to pay tax twice in both countries over the same source, the Netherlands grants a credit to compensate for the tax owed outside the Netherlands. This is commonly referred to as double tax relief.
7 Company cars (or bikes
If you work for a company and they provide you with a car which you use privately as well as for business, you will have to pay tax. The total amount you will have to pay depends on the value of the car when it was new, including taxes, and varies depending on how energy efficient the vehicle is. Find out more. There are also, believe it or not, specific rules if your company has provided you with a bike.
8 Mortgage tax relief and other tax breaks
The maximum amount mortgage holders can deduct from tax is gradually being reduced and last year the amount was cut to 50%. This means that if you are a high earner and pay 52% tax on some of your income, the mortgage tax relief break is only 50% – in other words, your mortgage will cost you a little more. You may also be entitled to tax relief on the cost of education and on some extra healthcare costs. You can find an overview of the changes made to tax law this year here.
9 Remember your Digid
If you have been registered in the Netherlands for a full year, you can do your own income tax filing using your Digid, the personal identification number used for all contact with government departments. So it is no good trying to complete the form on April 30 and then discovering you don’t have the all important number, because it takes a few days to get one. Be prepared.
10 And if you miss the deadline?
The Dutch tax year runs from January 1 to December 31. If the tax office has written to you asking you to file your tax return, it will give a deadline, which is usually May 1. You can ask for an extension and the tax office is fairly relaxed about providing one. Dial the toll free number 0800-0543 and ask. If you file your taxes through a tax adviser like Blue Umbrella they can request an extension (usually free of charge) for you.
For more information contact Blue Umbrella at phone +31(0)204687560, e-mail firstname.lastname@example.org or website www.blueumbrella.nl
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