There is no escaping it right now: it is tax return time. The infamous blue envelopes from the Belastingdienst (Dutch Tax Authorities) have been sent out again, so there's nothing else to do but put your administration in order and hand over your details for 2022. What are the most important things to keep in mind when completing your tax return? Blue Umbrella gives you all the necessary information in this article.
Deadline
All returns must be submitted by May 1, but it can be helpful to make sure your return is filed before April 1. If you do this, the Belastingdienst promises that your return will be processed before July 1. This means you will have clarity about what you need to pay (or what you get back) within a few months.
For anyone who has not received an official invitation to file a tax return, it can also be useful to do so voluntarily. You could be entitled to a refund for mortgage costs, for example, and the Belastingdienst may not necessarily alert you to this.
Of course, it is also possible to postpone filing your tax return, however, you should keep in mind that if you have tax to pay, the Belastingdienst are entitled to charge 4% interest.
Check your tax information carefully
If you decide to file your tax return online, you will see that the Belastingdienst will have already filled in some information for you. It is important to check this information carefully, especially if, for example, you have objected to the WOZ value of your property. Your modified value, if you have successfully objected, has probably not yet been included.
WOZ value
Every year your municipality determines the so-called WOZ value of your house. This is the basis for some local and national taxes. This year, however, WOZ values rose by record amounts, based on the steep annual price increases at the start of 2021. Since then, the housing market has shown a downward trend.
There have been a record number of objections because many Dutch residents believe the value of their residence is estimated at too high a level. If you have also lodged an objection, this has probably not yet been reflected in the pre-filled tax return, so you should check yourself and adjust the tax return where necessary.
Box 1, 2, 3
To determine tax, the Belastingdienst uses a three-box system. Each “box”, representing a type of income or wealth, has its own tax rates. Box 1 includes income from employment, real estate, and private property such as your home, car and art. Box 2 includes income from shares in companies in which you have a substantial interest of at least 5%. Finally, Box 3 is also known as the wealth tax and taxes income (or notional income) from savings and investments.
30% ruling
Most expats in the Netherlands are familiar with the 30% ruling. Thanks to this scheme, people recruited from outside the Netherlands, with highly sought-after employment skills, can be granted a tax perk. This mean that the first 30% of their salary is untaxed.
Since January 2019, however, the arrangement has been limited and the 30% ruling can only be used for a period of 5 years instead of the previous 8.
For several expats in the Netherlands, this means that the 30% ruling will come to an end this year. This not only means that the tax benefit will no longer be applied to your salary, but also that your global assets must now be declared in Box 3.
COVID-19
Finally, it is important to see where you stand with regards to any COVID-19 debts. You may have paid these off in full over the past year or be in the middle of a payment plan. In either case, it is important to include these figures in your tax return, as this may ultimately be beneficial for you.
File your tax return on time
Be wise and don't leave your tax return until the last minute. Find a tax advisor early and face spring worry-free.
Need help with filing your Dutch taxes this season? Blue Umbrella offers fixed-fee tax filing services for expats in the Netherlands. They also offer support for small business owners and entrepreneurs.