Anyone living in the Netherlands and owning real estate in countries such as France, Turkey, Morocco, Suriname, or any other foreign country, must declare this on their Dutch tax return. By correctly completing the declaration, you can benefit from deductions in the Netherlands due to the taxes you already pay abroad. Assets like a residence, vacation home, plot of land, building, garage, or other real estate in countries like Spain, Greece, Germany, Belgium, Indonesia, and any other foreign country fall under the Dutch box 3. The value of these assets must be reported in the annual income tax declaration in the Netherlands. This refers to the market value of the real estate when it is unoccupied.
Do you earn a lot in one year and somewhat less in another? Up to and including the tax year of 2024, there’s a Dutch regulation specifically designed for this scenario. This rule is called the middelingsregeling (income averaging scheme), and it can sometimes offer substantial financial benefits. But how does this averaging work precisely, and how can you take advantage of it? If your income fluctuates, the income averaging scheme (middelingsregeling) can offer you benefits. The last period you can average includes the years 2022, 2023, and 2024. After that, it won’t be possible.
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.
Read more: Pros and Cons of Dutch Fiscal Partnership
In the Netherlands, there is officially no wealth tax, but there is a capital yield tax (vermogensrendementsheffing): you pay a tax on your capital return from savings and investments. This tax is detailed in box 3 of the income tax. You pay tax on the returns from assets, which is offset by the returns from liabilities. The primary residence is not included, but any potential rental property in the Netherlands is. This tax is not on the actual returns made, but the government determines what return you would have made (fictitious returns).
Read more: Tax on Savings and Stocks in the Netherlands
Are you each other’s fiscal partner for the Dutch Income Tax (Inkomstenbelasting) and hence when filing your tax return? You can only have 1 fiscal partner at a time. In this article, you can easily see if you’re each other’s fiscal partner in the Netherlands. Being fiscal partners has its advantages. For example, you can allocate certain tax deductions like healthcare expenses, educational costs, and charitable donations between you. This has consequences for your tax return, but also the level of income, the threshold amounts, potential tax credits (heffingskortingen), and possible benefits.
Read more: Do You Have a Dutch Fiscal Partner?
The benefit partner (toeslagpartner) is the person with whom you apply for a benefit, such as the healthcare benefit (zorgtoeslag) or the rent benefit (huurtoeslag). It’s not possible to have multiple benefit partners. Spouses or registered partners are automatically each other’s benefit partners. The concept of benefit partner is broader than the term partner. If you’re not married and there’s no registered partnership, you can still have a benefit partner. For instance, adult children, siblings, parents, and friends can also be your benefit partner.
From January 1, 2020, a new small business scheme (KOR, kleineondernemersregeling) is in effect in the Netherlands: the exemption from turnover tax (omzetbelasting). This scheme can be beneficial in certain situations. If your revenue is less than 20,000 euros per year, you can choose to enroll in the new scheme. So, it’s a choice; you can also decide not to enroll. If you opt for the new scheme, there’s no need to file a VAT return or remit any VAT. It’s important to weigh the pros and cons before making a decision. Understanding the specifics can help you maximize your benefits.
Is the purchase of a lottery ticket that supports charities deductible on the Dutch income tax return? This is a question that arises every year when filing the tax return. And if you can’t deduct the entire contribution, can you perhaps deduct part of the payment? Maybe in proportion to how much money the lottery gives to charities? Most people have heard of the Dutch charitable deduction. Donations to charities or institutions can be deducted from income on the income tax return in the Netherlands. This means that the amount on which tax has to be paid is reduced, resulting in less tax payable. It is therefore a logical thought that payments to lotteries, which donate a significant amount to charities, are partly deductible as a donation. But is this the case?
Every parent knows: children not only bring joy and cherished moments but also additional expenses. From schoolbooks to new clothing and those spontaneous treats – the costs can add up. To support families, the Dutch government introduced the Dutch child budget (kindgebonden budget). This financial support, which you can receive on top of the child benefit (kinderbijslag), is an income-dependent contribution for children up to 18 years old. This scheme is not only intended for families with a lower income but also provides support to families with an average income. What exactly is the child budget, are you eligible for it, and what does it mean in different family situations like co-parenting?
Many people do not have enough money to buy a house, which is why they often take out a mortgage from a bank. A mortgage is simply a loan, but a special type of loan where the house acts as collateral. The interest you pay on it is deductible in the Netherlands. For mortgages taken out on or after January 1, 2013, repayment is required to obtain this mortgage interest deduction. There are many different types of mortgages. It’s good to understand the various options and their conditions before taking out the loan. It’s wise to familiarize yourself with them before consulting a mortgage advisor. This prepares you for the conversation and allows you to ask the right questions.