As resident of The Netherlands expats are taxed on their worldwide income. Expats will have to report their income and their assets to the Dutch tax authorities by filing a Dutch income tax return.
An income tax return needs to be filed upon receiving a letter from the tax authorities or when a tax liability exists. Failure to file will result in fines from the authorities. The filing deadline is 1 May 2018. Extension may be granted by contacting the authorities and extension will be provided automatically when the tax return is prepared by ExpatTaxes.
In order to lower your tax liability Expats may use the deductions and exemptions provided by Dutch tax law. The following costs may be deducted:
- mortgage costs such as interest costs and other costs made in order to obtain the mortgage;
- study costs;
- health costs not refunded by a health Insurance company;;
- premiums for life Insurance;
- alimoney payments to the ex-spouse;
- cost of maintaining Dutch property provided the property is classified as a Dutch national monument.
Deductions and especially deductible costs related to the mortgage usually provide for a significant refund. Instead of waiting to file a tax return in 2019 related to costs made in 2018, a request can be made for a preliminary refund. The preliminary refund allows expats to receive their refund now instead of waiting until 2019. ExpatTaxes can file a preliminary refund for you.
Relief of double taxation helps Expats to lower their tax burden. Double taxation occurs when income or assets are taxed both abroad and in The Netherlands. Depending on the type of income and the tax treaty, The Netherlands may have to provide relief of double taxation by exempting the income or providing a credit of foreign taxes. When done properly it could save a significant amount of money. In addition, a refund of foreign withholding taxes on interest and dividends may be requested depending on the percentage withheld and the applicable tax treaty.
Applying for the 30%-ruling is another method of saving taxes. The 30%-ruling lowers the taxable salary by 30%. In addition, Expats who have been granted the 30% ruling are not taxed on their worldwide savings and investments with the exception of Dutch property. A spouse may benefit from the 30%-ruling as well since a fiscal partner is not taxed on his or her savings and investments provided the fiscal partner has been granted the 30% ruling.
ExpatTaxes provides Tax consultancy and compliance services to Expats. Please contact us if you have question on filing a tax return, 30% ruling issues or general (international) tax issues. We would be happy to help you.