Income tax returns and allowances for “Expats”
This document gives an overview for:
- Income tax return
- Allowances (“toeslagen”)
Income tax-return system in the Netherlands
Box 1 – Income as an employee and/or business owner and deductables
- Income as an employee (“Jaaropgave”)
- Income as a business owner (fiscal profit is taxable)
- Interest paid on the mortage (deductible)
- Value of the house “WOZ-waarde” – to be paid 1,85% of the value of the house
- Pension scheme (paid monthly to a bank/insurance company
- Study cost – deductable (first 250 is not deductible)
The total of the above bullits are taxable. In 2016 we have 4 categories:
- Income up to 19.922 – 36,55% to be paid income tax
- 923 – 33.715 – 40,4%
- 716 – 66.421 – 40,4%
- > 66.422 – 52%
Your employer will pay your monthly wage tax as a prepayment for the income tax.
As a business owner you still need to pay taxes. There are 2 taxes:
- Income tax (see above table)
- Tax for health insurance 4,85% of taxable profit (maximized up to income of 51.974)
Box 2 – Income as owner of incorporate
Box 3 – Income from private savings / shares / Land minus your lendings
The total income of Box 1,2 and 3 is called “verzamelinkomen”.
Living and working in the Netherlands for the first Year with or without 30%-ruling.
For the first year we use a M-form to do the income tax return. After this year we use the normal form for the tax return. If your employer can use the 30%-ruling then you are allowed in the income tax return to obtain for a partially foreign taxable-ruling. This means income for Box 2 and 3 in the Netherlands can be excempt, so not taxable.
If you have a relationship and your partner lives in the Netherlands too then there is a possibility to become fiscal partner for tax perspective. Your husband/wife receives a general allowance even if she doesn’t work in the Netherlands.
Allowances (toeslagen) in the Netherlands
The allowances are not part of the income tax return and can be requested seperatly. The allowances (based on your income in a year) will be paid out monthly as a prepayment. After the yearly tax return a final allowance is calculated. The outcome results in a repayable, an extra allowance or nothing and you receive a final document for this.
The basis for an allowance is the “Verzamelinkomen” of both you and your fiscal partner. There are 4 allowances:
- Huurtoeslag – allowance of renting a house
- Zorgtoeslag – allowance regarding medical insurance
- Kindgebonden budget – allowance for your child(ren)
- Kinderopvang toeslag – allowance for kindergarten