We are increasingly willing to work in the Netherlands, usually through employment agencies, which is hardly surprising, as wages in this country are much higher than in many other parts of Europe. However, when working and living in the Netherlands, that is where you are subject to taxation. Belastingdienst, i.e. the Dutch tax authority, will send you a letter based on which you can submit your tax return and possibly receive a refund of the overpaid tax. How do you settle your tax affairs in the Netherlands?
Who is obliged to settle their income tax affairs in the Netherlands?
Generally income tax must be paid on one’s earnings. In the Netherlands, it is deducted weekly or monthly from your salary and paid to the tax office there as an advance payment of income tax. However, the mere fact of paying advance payments toward this tax doesn’t relieve those working in the Netherlands from the obligation to submit an annual tax return to Belastingdienst.
It’s obligatory for anyone who has received a relevant letter of demand from Belastingdienst to submit their tax return. Aangiftebrief, i.e. the said official letter, is usually received from the tax office in mid-February.
Even if you haven’t received it, it may happen that you’ll have to submit the documents to the tax authorities anyway, which depends on the amount you are to receive or pay back.
- If the amount of the refund is a minimum of 16 EUR, then you should file a return. Amounts under 16 EUR are not returned by Belastingdienst, so you don’t have to submit a tax return in this case.
- If the amount of tax to be paid is at least 48 EUR, then a return must be filed. This must be done by July 14 of the following year. Otherwise, you will have to pay interest. If, on the other hand, you fail to submit your statement before this deadline and Belastingdienst sends you a relevant reminder, it can also impose a financial penalty on you. If the amount doesn’t exceed 48 EUR, you don’t have to submit a tax return. Provided, of course, that you haven’t received an Aangiftebrief from the tax office.
What’s the deadline for settling your tax affairs in the Netherlands
In the Netherlands, you can settle your income tax affairs for the previous year from March 1 to July 14 of the following year. If you have received a summons from the Dutch tax office, it says by when specifically you have to submit your tax return. Usually, it’s May 1. You must adhere to the above time limits if you don’t want to pay penalty fees. Having said that, if you’re keen to receive your tax refund quickly, you should submit your return by April 8.
What about people who have worked in the Netherlands, but haven’t found the Aangiftebrief document in their mail? Such people can defer the submission of their tax return for up to five years. There is one condition, though! They must be confident that they are due a refund for the tax year. Otherwise, they will pay penalty interest.
How to file a tax return in the Netherlands?
The easiest way is to submit your statement online by logging into your profile on Mijn Belastingdienst (My Tax Office). For this, you need to have a DigiD.
- If you’re currently living outside the Netherlands, you can log in to the Dutch tax office using your DigiD or the login and password assigned to you. A login and password can be requested using the form available at this link. You will receive your login details in 10 days.
- In the event of a summons, a set of documents comes with the letter from Belastingdienst. These must be completed and returned (on time) to the tax office address provided.
Importantly, If you are a tax resident of a different country, you’ll likely have to report your income earned in the Netherlands in your domestic tax return. And it doesn’t matter whether you are claiming a tax refund in the Netherlands or not.
What tax refund can you expect?
First, to know whether you will receive such a refund, it is worth doing an annual return. It turns out that several factors affect the amount of the tax refund. These include:
- tax rebates;
- amount earned;
- family situation.
Then, all the necessary data must be entered in the online return form billing or manually, using a relevant tax return document. Only after doing this will you get an answer to the question of whether you are due a tax refund and what amount you will receive. The Dutch tax office will take up to three months from receipt of the tax return to send you its decision (aanslag), stating how much you will receive/need to pay and by when.
What documents are needed to settle Dutch tax affairs?
To settle your tax affairs in the Netherlands, you need to prepare the following documents:
- personal data – including your BSN number, as well as your partner’s and children’s, your bank account number, and your and your partner’s DigiD;
- information on your registered residence – with the dates i.e., the exact period when you were registered as a resident in the Netherlands;
- income earned in the previous year – i.e. an annual statement of income from a Dutch employer (called jaaropgaaf or jaaropgave) or, if you don’t have one, payslips or alimony received from your partner;
- a list of savings and investments – i.e. an annual report, including bank account balances, for the previous year, the same report for your children’s savings and accounts, information on assets held not only in the Netherlands but also abroad, as well as an annual report with investment balances;
- real estate – i.e. the value of your flat, an annual report with mortgage balances, if the flat was bought and sold, as well as financial settlements from the notary;
- deductions – in this case, you need proof of payment and you can deduct donations made to a specific organisation, healthcare costs that weren’t reimbursed by the insurer, alimony paid to your partner, as well as tuition costs – if, however, you aren’t entitled to a student grant;
- other information – i.e. loans and debts, disability pension contributions, disability insurance, or dividends.
What is the penalty for failing to submit a tax return in the Netherlands?
If you ignore the Aangiftebrief summons, you receive, you have to take into account that Belastingdienst can impose on you a high financial penalty, ranging from 385 EUR to as much as 5,514 EUR. All you have to do to avoid paying it is submit your tax return in the Netherlands on time. If you fail to do it, the tax authority will send you a reminder, known as Herinnering, after a few weeks. If there is still no response on your part, you will find a final summons, called Aanmaning, in your mailbox. From the moment you receive it, you have 10 days to fill out the tax return form. If you fail to do so this time, too, a penalty will be imposed on you by the local tax office and administrative proceedings will be initiated against you.