You arrived from abroad into the Netherlands the one year and the other year you leave from the Netherlands to live abroad again. Can you get a tax refund?
Migration income tax return, or income tax refund?
The Dutch income tax return that is due for arriving or departing the Netherlands is referred to as the migration income tax return. Or the M form. Migration stands for you moving your central point of life in or out of the Netherlands.
Can you expect an income tax refund?
Often you can. How is that possible? Privacy rules forbid the employer to know about your private life. Even though the employer might have attracted you from abroad, or you simply told your employer or your employer knows you leave to return to your home country. The payroll system cannot take this information into account.
Hence the payroll system calculates the wage tax withholding based on you working in the Netherlands the full year. If you earn EUR 80.000 gross a year, then part of your monthly salary is the tax rate of 52% to avoid you being due income tax at the end of the year. If you then decide to leave the Netherlands after three months, you earned EUR 20.000 which is in the 37% tax bracket. The employer withheld 52% and you are actually due 37% income tax. That is how the income tax refund is being created.
Can I always have an income tax refund?
That depends. If you arrived in January or left in December you are so close to the start and end of the financial which equals the fiscal year, that we expect nearly no refund.
Can I be denied an income tax refund?
Yes you can. Your central point of life determines where you are a tax resident. If you move that point by going to another country, you are migrating your fiscal position. The Dutch Government uses a tool to determine whether you are arriving or departing from the Netherlands and that tool is City Hall. The moment you arrive you register with city hall, the moment you leave you deregister with city hall.
Can a Migration form be denied to you?
Yes it can. If the system does not see you migrating, no migration income tax return is issued to you. This is possible when you forgot to deregister when you left the Netherlands. Can this be solved? Yes we can solve this for you, but it is not a quick fix.
M form online?
The M form is a dragon of a Dutch language form, which you cannot do online. We do experience many expats to have filed online tax form that the Dutch tax office set ready for them, assuming this would be the M form. The assumption is made on the basis that you have either registered yourself or deregistered yourself with Dutch city hall, hence you assume the tax office knows you are due a so called Migration income tax return.
That assumption we can understand, but that is also exceeding the ability of the Dutch tax system. The tax return ready for you is not an M form. If you file this income tax return, it is being denied by the Dutch tax office. Consequently the Dutch tax office issues to you the 86 page Dutch tax from to be completed.
The problem with this form is not only the language, not only it being a dragon, but also that there has been set a timeline in which the tax office expects you to file this income tax return. When the deadline is missed, you are not immediately issued a EUR 369 penalty for being late. The tax office does have some sympathy for you being asked to complete this form. But do not push the tax office patience too long please.
M form online? Yes we can – and we are very much excited about filing the M form!
The difference between you, the tax payer, and us the professional registered tax advisor is that we can file the M form online with the Dutch tax office. We can even present you a version in the English language so you understand what is being done in that tax return.
Orange Tax Services – Tax is Exciting!
We are pleased to inform you that we can file your migration income tax return for EUR 390 incl VAT. Your tax partner is included in the fee. Only if you were an entrepreneur in the Netherlands, you need to file the profit migration income tax return and that we charge at EUR 550 ex VAT instead, still your tax partner is included in this fee.
