It’s that time of year again...TAX RETURN season (deep breaths and big smiles, we got this people). For many of us, we are braced for that blue envelope to glide through our front door and into our hands so we can begin to resolve its contents.
BUT WAIT! What about those new international hires and employees?
It’s a daunting task to approach as someone who has never dealt with the Dutch tax system before and working in HR you may get a question or two about this. It won’t always be easy, come on, ITS TAX, but we have done our best to break it down as simply as possible for you and your employees!
How does it work?
In typical Dutch style, the Dutch financial and tax system is highly-regulated, ultra-organised and drowning in red tape.
First and foremost, the tax year in the Netherlands runs from 1st January to 31st December. However, you can not file your taxes before 1st March!
Do I need to file my taxes?
- In the case that you receive an invitation from the Dutch tax authorities, you are obligated to file a Dutch income tax return. When you work as an employee for a full calendar year, you will most likely not have to pay any additional Dutch income tax. If you are in such a situation, you will probably not even receive an invitation from the tax authorities to file an income tax return.
- If you haven’t received an invitation from the Dutch tax authorities to submit a Dutch income tax return, you can still file an income tax return. For example, if you know you have to report income to the tax authorities that haven’t been taxed yet such as income from self-employment. In that case, you are obliged to submit a Dutch income tax return.
- On the other hand, if you have tax deductions (for example mortgage interest or study costs), you may want to submit your income tax return to claim the tax deductions.
- Even in case you do not have anything to declare other than your regular employment income, it may still be worth to submit a return. For instance, if your partner is not working he/she can claim under certain conditions a tax credit for the non-working partner with a maximum of EUR 661 or if you and your partner both work and have a child under the age of 12, you may be entitled to the income-depending combination tax credit with a maximum of EUR 2,835.
If you’re unsure about whether or not you have to file your taxes, do check on the Tax Office’s website.
When do I file my taxes?
The filing deadlines with the Dutch tax authorities are May 1, 2020, for full-year resident taxpayers and July 1, 2020, for non-resident and part-year resident taxpayers.
On the 1st of March every year, the Belastingdienst (Tax Office) releases a link to file your taxes (for 2019 please click here).
How to get a Digi-D account?
In most cases, you will need a Digi-D account to file your taxes. In some cases, the first year tax return is not available online and in these instances, you will receive an M form via the mail or you can order one here.
If you don’t have a DigiD account, please click here to apply for one.
How do I file my taxes?
Once you have used your Digi-D to log in to your account, you will find that a lot of information regarding your income and any taxes paid will have been automatically pre-filled.
You still do have to check the information as it is your responsibility that all the information is correct.
Now, all that’s left to do is fill out the remaining information and submit the form. Always keep a copy on file for your own administration!
What happens next?
You should receive an assessment from the Tax Office after filing your annual tax return within 3-9 months.
Which deductions are available?
If you own a house, look at this page to find out about all the possible deductions.
To find out about other deductions specifically around personal budget (e.g. study costs, health care, paid alimony, gifts, etc) which may entitle you to a rebate, please check here.
If your tax situation is more complex - for example, if you have overseas income or tax obligations, assets or capital, house ownership, fiscal partner, children - it may be advisable to hire an expert.
Looking for support?
We work with various tax advisors who support business as well as individuals, such as Hillbrook (our immigration & tax partner who helped create this article) and if you need any recommendations, please drop us a note and we will be happy to connect you.