When filling out your income tax forms there are some tips that you should consider. These tips will help you get the most out of the income tax filing and help you ensure it is completed correctly.
New To The Netherlands?
If you are new to the Netherlands you may need an M form. How you file your taxes will depend on your personal situation for the last year. One point you need to consider is whether or not you were a resident of the Netherlands for the entire year. If you were not resident for the entire year you will require an M form and you will not be able to file your taxes online.
The process for filing your taxes for the year of your immigration is more complex than normal. You will have to pay attention to what you earned during the time outside the Netherlands and once you arrived. If you moved to the Netherlands as part of an intercompany transfer then the date your payroll moved will play a role in your filing.
If you only spent part of the tax year in the country it could influence the social security premiums you fall into. The premiums are generally calculated on a pro rata basis. A part exemption for social security will need to be claimed in your tax return.
Be Aware Of Tax Treaties
A tax treaty gives other countries the right to tax you on your income for the year. If you have spent 183 days in another country or if the company you work for is based in another country they could have the right to tax you. The Netherlands will grant a credit or exemption in these cases. However, you will still need to file your worldwide income in your return, but claim for the part exemption.
Tax Exemptions And 30% Ruling
If you have partial non-resident status and qualify for the 30% rule you could be entitled to an exemption of box 3 taxes. These taxes will cover net assets like shares and savings. However, any property that you have in the Netherlands other than your primary residence will still be taxable under the 30% ruling. If you want to get things down in greater detail look at these tips from VatGlobal.
Deductible Mortgage Interest For Your Primary Residence
The interest you pay on your mortgage can be deducted from your taxes if it is for your primary residence. This deduction can be claimed in the year of your immigration and for the years after this. This deduction is applicable for homes that are for sale or vacant expecting return to the Netherlands.
Resident Related Deductions
If a property that you own in the Netherlands is a heritage listed or monumental property you could deduct the costs of renovations and maintenance from your taxes. You could also deduct the annual land lease costs. However, improvements to the property cannot be deducted.
Tax Rebate For Non-Working Spouse
It is possible to claim a tax rebate if your spouse is not working and you have both been residents for a full tax year. The tax refund you can claim is a maximum 2200 Euros, but does change each year. You will need to file your tax returns jointly in order to claim the tax rebate.
Check For Childcare Allowances
The childcare allowance in the Netherlands is not strictly an income tax point, but is linked to your income tax. The allowance you can claim will depend on your joint income and the number of hours that your child has spent in childcare for the year.
You will need to file the request for childcare allowance on time in order to claim. This is usually within 3 months of your child first going to childcare. It is important to note that the monthly allowance that you will receive for childcare costs may have to be partially paid back if the income on your return is higher than estimated or your child did not spend the total quoted hours in childcare.
Make Use of Self-Employment Tax Breaks
If you have your own business or are otherwise self-employed you will be eligible for self-employment deductions that will lower your overall taxable income. You will need to keep track of the total number of hours that you work for your business because some deductions have a requirement of 1225 hours needing to be worked for the year.