If you are fiscal partners with each other in the Netherlands, this can affect your tax return and the amount of your benefits (Toeslagen). It’s important to understand that you can only have one fiscal partner at a time. But what are the advantages and disadvantages of a fiscal partnership? Since 2011, fiscal partnership is no longer a choice – the Tax Authority (Belastingdienst) determines based on certain conditions whether you are fiscal partner or not. If you meet one of these conditions, you are fiscal partners. In most cases, this works to your advantage and allows you to pay less tax.
Conditions for Fiscal Partnership
If you are married or are registered partners, you automatically become each other’s fiscal partner. And if you are registered at the same address, both adults, and have a notarial cohabitation agreement, you are also fiscal partners.
Even Without Marriage
If you are not married but are registered at the same address, you can be fiscal partners. For instance, if you have a child together, have recognized the other’s child, or a minor child of one of you is registered at the same address, or you are each other’s pension partners, or jointly own a property.
Family Members
Family members can also be fiscal partners, but there is an additional condition: both blood relatives must be older than 27 years and in addition, one of the above conditions must apply.
You can only have 1 fiscal partner at a time. Often, your fiscal partner is also your benefit partner (toeslagpartner).
Benefits
One of the significant benefits of fiscal partnership is that you are allowed to allocate certain income and deductible items between each other. Deductibles from both partners can be claimed by the partner with the highest benefit, providing a tax advantage in most cases. Below is a list of income and deductible items that can be allocated between partners:
- the balance of the income and deductible items from the primary residence (mortgage interest deduction)
- deduction due to no or a small home-owning debt
- benefit from a substantial interest (box 2)
- the joint base for saving and investing (box 3) (this does not apply in the year of death)
- paid alimony and other maintenance obligations
- expenditure on specific care costs
- expenditure on temporary home stay for a severely handicapped person
- study costs or other educational expenses (up to and including 2021)
- donations
- remaining personal tax deduction from previous years
General Tax Credit
If only one partner has income, fiscal partnership is also beneficial. The partner who earns little or nothing will then, thanks to the fiscal partnership, be entitled to the general tax credit (algemene heffingskorting).
Disadvantage
Fiscal partnership also affects your threshold income. Fiscal partners must combine their incomes to calculate the threshold income. This may sometimes mean that you are not entitled to certain deductibles.
Consider outsourcing your tax return to Taksgemak. It is very cost-effective.
