The income tax return, what types are there you might wonder, what are my obligations, what costs can I deduct?
Types of income tax return
We have the regular income tax return (P), the entrepreneurs income tax return (W), the non resident income tax return (C) and the migration income tax return (M). We also have the F tax return, F stands for finished or deceased.
What return you need to file is set ready by the Dutch tax office. If you have registered a company your P form will be denied, as that should have been a W form. The same when you migrated, then you need to file a M form and your P or W form will be denied.
What are my obligations?
One of your obligations is to file an income tax return if one has been issued to you. Some people request for the 86 page in solemnly Dutch printed tax blabla Migration income tax return. If issued to you, you need to file, even if you regret your invitation, as the outcome is for instance zero.
The penalty for not filing in time is EUR 369. Before that penalty is issued to you, you will be reminded a number of times.
Should you not have been invited to file, then you are obliged to file a tax return yourself not later than 2 weeks after the official deadline of May 1 if you know you are to pay income tax. You know that you are to pay income tax if you had a labour income source not being employment or self-employed. An in between kind of income. You are to file an income tax return if your worldwide assets exceed the threshold amount of EUR 100.000 (2021).
We understand you might be an international that does not know the rules. Most Dutch do not know the rules, but you are ought to know the rules. Hence this obligations can be put on you.
What can I deduct?
Not a lot, simple as that.
Mortgage deduction
We have a mortgage deduction, which implies you can deduct the costs of the loan taken out to purchase the house that is your main residence.
Study cost deduction
We have a study cost deduction, which implies that you can deduct study costs made for an improvement of your economic situation. The costs need to have been made during your stay in the Netherlands and paid by you, not being compensated by an employer to you. The repayment of a study loan is not a deduction. It is about the actual study. This study cost deduction terminates as per December 31, 2021.
Charity donation
Charity donations made to a charity organization recognized as such by the Dutch tax office. The threshold is 1% of the combined income as minimum and 10% as maximum. No minimum threshold if the donation is done by notary deed for at least a five year period.
Pension payments
Pension payments, in Dutch lijfrente, could be deductible. However, if your employer already has a pension arrangement with you, you cannot deduct for the value that pension has increased. That value is translated in a so called A value. That A value determines what or if you can deduct any of your private made pension payments.
Alimony costs
Alimony costs to your ex-partner based on court agreement. Condition is that you can provide details of your ex partners such:
- as tax number and or
- address details,
as the alimony deducted on your side is taxed on your ex partners’ side. Alimony paid for children is never deductible, as children always cost money, separated or not.
Tax is exciting
Tax is exciting and we get excited about filing your tax return. You might not share our excitement about filing a tax return, but we try to make the process more pleasant for you by using fixed fees. We have a fixed fee for the regular (P), migration (M) and non-resident (C) tax return of EUR 390 incl VAT including possible tax partner (2021 rate) and EUR 550 plus VAT for the entrepreneurs income tax return (W) (2021 rate). Feel excited to contact us!
