The Ultimate Dutch Income Tax Checklist
The Dutch economy is fast-paced, diverse, and advanced. It offers opportunities across every industry and at various levels, for all interests. This hunger for talent is the main reason why its high-skilled migrant visa exists. This is a factor that means the Netherlands is often ranked as one of the best places in the world for expats.
But while we internationals do love our welcoming new home, we all dread tax season! All the documents of the Dutch tax office (the ‘Belastingdienst’) are in Dutch. And the national tax code is not always straightforward. It has many deductions you need to consider.
To make your life a little easier, we have prepared a super-handy dutch income tax checklist. The following items will prepare you to file an income tax return with our friends at Blue Umbrella – an official partner of the Belastingdienst. The general deadline is the 1st of May after the concerning taks year. Taxes are a headache any busy expat could do without! But with these simple steps, it should be easy to dodge them.
General & Financial Information to be Provided
Types of Valid IDs
You will need to supply a few details serving as proof of identity. Along with your citizen service number (referred to as a BSN), a copy of a valid ID card is necessary. This could include a foreign passport, a Dutch residence permit, or a Dutch driver’s license.
If applicable, you will also need to supply the same documents of your spouse or fiscal partner. If you have dependents living with you, such as children, you will need to supply their details as follows:
- BSN number
- Date of Birth
To process your income tax return you’ll need to submit paperwork. Part of this includes your last year’s income tax return (Dutch only). You may also need to supply the invitation and/or assessment sent to you by the Dutch government. Even if you haven’t received the invitation, though, it’s a good idea to file, as you may get a refund! Keep in mind if you are filing for a broken year (i.e., the year you came to NL) make sure to fill in the M-Form. If you need help with that contact the guys at Blue Umbrella, to submit your taxes fully online.
Overview of Financial Assets
Unless you’re on the 30% ruling (a tax scheme for high-skilled migrants), your assets outside the Netherlands are taxable. This means you will need to provide proof of your worldwide assets. Details include the following:
- Foreign and Dutch Bank accounts (checking and savings accounts, don’t be sneaky!)
- Foreign and Dutch Investment accounts (this applies to online brokers)
- Online brokerage accounts
- Your worldwide properties, besides your residential home
It’s important to be honest when presenting this information. Due to various tax treaties, the Belastingdienst can check accounts in certain countries.
Complete Income Overview Local & Worldwide
To complete an accurate income tax filing, you need to provide an overview of all your income sources. Generally speaking, this means:
- Jaaropgave or Annual income statement
The annual income statement or ‘Jaaropgave’ is a statement provided by your employer at the end of the year or the following year. It should state how much you have received in wages as well as taxes you’ve already paid. It also includes premiums and other taxable items such as for a company car, when applicable.
Freelance or Side-Hustle Work
If you are a freelancer, you need to submit your profit and loss statement. The tax applies to the profit. You must submit this, irrespective of if you are a full-time freelancer or only part-time. And, as you can earn extra income even if you do not have a company registered, you should also submit these.
As a freelancer, you should also submit the following:
- Receipts for expenses incurred
- Invoices sent to your clients
- VAT filings throughout the year
- An hour sheet proving you meet the 1225 hour criteria. This can save you thousands of euro’s a year in relation to the starter’s deduction and the small entrepreneur’s deduction.
Income from Alimony
Alimony is money you receive from your ex-spouse after a divorce. Divorce can be hard, that’s no great secret. Emotional and financial turmoil can ensue throughout the legal wrangling. And so, of course, partner alimony received will get taxed – because God forbid you ever catch a break after all that. You will need to supply the Belastingdienst with information on alimony payments. Also, keep in mind, that you should provide the contact details of your ex-spouse or ex-partner, though only partner alimony is deductible in the income tax filing. Not child alimony.
Property & Real Estate Checklist Items
For your tax advisor to file your income tax, they need an overview of all the property you own. This includes both your main residency and any investment properties you have.
If you own a property
Property owners need to provide some items which will impact final tax assessments.
If this applies to you, provide the following items for yourself, as well as those of your fiscal partner:
- WOZ value statement from the municipality from the previous year per January 1st. The ‘waardering onroerende zaken’ is a municipal assessment of your property’s value. You receive a WOZ statement every year, most likely around February
- Annual Mortgage overview of the mortgage interest payments for your house
- Payments made for the leasehold (‘erfpacht’)
Purchase or sale of property in the fiscal year?
- Mortgage overview from your bank or lender
- Statement (‘Afrekening aankoop’) and invoice from the notary
The ‘eigenwoningreserve’ is the gap between the sale price, and the remaining debt on your property – minus real estate agent costs. It will impact what proportion of your new mortgage is tax-deductible. You receive a statement of this on the sale of your property. You will need to provide the eigenwoningreserve to your tax advisor.
Last but not least, a correct income tax return includes tax-deductible items. These are for yourself, and your spouse or fiscal partner. These are items that get removed from your income to reduce your final tax bill.
Make sure to include the following:
- Non-insured healthcare costs. This includes healthcare and dental care costs which you were not insured for. This could be medication, dental expenses, or other doctor or diagnostics expenses incurred. If these happened abroad, make sure to keep your receipts. If they took place in The Netherlands, they will most likely be in your health insurance overview.
- Educational expenses. If you received some form of training these expenses are income tax-deductible if they were made especially for your profession. . This includes taking a course, enrolling in Dutch school, or a university MBA program. As well as tuition fees, required reading, and bills related to the education.
Note: Please also note that from 2022 onwards declaring your tuition fee cannot be done anymore through the income tax filing, but needs to be requested with the UWV and goes by the so-called STAP budget.
Once you have gathered all these items make sure to reach out to Blue Umbrella. Written in English, its easy-to-use online platform can save expats time and money. As an official partner of the Dutch tax office, the site includes a Dutch Income Tax Calculator tool. It also provides professional advice for expats who need further help. If you’re in employment, or a small business owner, Blue Umbrella can make tax season less dreadful for you!