8 essential tax tips for expats in the Netherlands

It's the season again - for filing your income tax in the Netherlands. The Dutch Tax Agency has simplified and digitised the process even more this year, by automatically filling in the data that is available to them. For many people it will be a case of just verifying that all the numbers are correct.

It can be a different matter if you’re an expat. It’s possible that you are eligible for exemptions or rebates, and how should you file your taxes if you spent part of the year in another country?

1. New in the Netherlands? You may need an M Form

If you haven't spend the whole year in the Netherlands, you can't file your taxes online. In this case you need an M Form

2. Be aware of tax treaties

Tax treaties may give other countries the right to tax part of your income. It's different in the Netherlands. Here you need to file your worldwide income if you are a resident of the Netherlands, but you can claim part exemption.

3. 30% ruling and tax exemptions

If you qualify for the 30% ruling and you have (partial) non-resident status, you may be eligible for an exemption for box 3 taxes, which cover net assets such as savings and shares.

Keep in mind that property based in the Netherlands, other than your primary residence, is still taxable even if you are under the 30% ruling.

4. Mortage interest on primary residence is deductable

You can deduct the interest you pay on your mortgage for your primary residence. Did you also know that in the year of and the years after emigration, mortgage interest may also be deducted? This is applicable when the home is either for sale, or is left vacant pending an expected return to the Netherlands.

5. Benefit from residence-related deductions

If you own a heritage listed (monumental) property in the Netherlands it's possible to deduct the cost of maintenance and renovation, along with the annual land lease costs (erfpacht). Be aware that improvements are non-deductable.

6. Non-working spouses eligible for tax rebate

If your spouse is not working, and you have both been residents for the full tax year, you can claim a tax refund of up to a maximum of 2.200 euros (in 2015) through filing your returns jointly.

7. Check your childcare allowance entitlements

The Dutch childcare allowance is not strictly an income tax item, but it’s very much linked to your income tax. The allowance you’re entitled to depends both on the amount of hours your child spent in childcare and on your (joint) income.

Make sure that you file the request for the allowance on time, which is within three months after your child goes to childcare.

Be aware that a monthly allowance received in the course of the year may have to be (partly) paid back if your actual income is higher than estimated, or if you used fewer hours of childcare.

8. Make use of self-employed tax breaks

If you have your own business, during three out of the first five years, you are entitled to self-employment deductions that will considerably lower your taxable base. It is important to keep track of the number of hours you worked for your business, because a few of the deductions have a minimum requirement of 1.225 hours worked per year.

Source: IAmExpat