We offer Tax return services to unburden you of the complexity of the Dutch tax system. As in most countries, tax laws are complicated and therefore it is advisable to check with a tax consultant in order to minimize tax. Also, international situations may further complicate the tax treatment, but on the other hand offer possibilities for tax planning.
The number of possible tax deductions in the Netherlands is huge and this makes it a complicated job to fill out your income tax return form. You’ll recover your costs quite easily.
Settle Service informs you on the procedure and required documents. We will then receive and check information from the tax advisor, and will instruct said advisor (after receipt of your approval) to send the final personal income tax return form to the tax office. You will receive a soft copy of the final personal income tax return form for your administration.
In addition to the basic service, we provide consultation by phone for a maximum of one hour, will review the tax assessment (preliminary/provisional) after receipt of final assessment from the tax office. If needed, Settle Service will arrange a letter of objection against the Dutch income tax assessment.
The Dutch tax system
The taxation of individuals in the Netherlands is based either on residence or on certain Dutch types of income. A resident of the Netherlands is usually taxable for his worldwide income and a non-resident is only taxable for certain types of Dutch income. The fiscal year is the same as the calendar year.
The Dutch tax system is a so-called graded tax system. The more income you have, the higher the tax percentage in the grade. Please see the site of the Belastingdienst for the grades and applicable tax percentages.
Before May 1 of each year, citizens have to report their income from the previous year. You will receive a personal request for the tax return declaration, that you (or your tax consultant) can only submit digitally. You will need a DigiD for this (see separate resource).
The system integrates the income tax with fees paid for the basic old-age pension system (AOW), the pension system for partners of deceased people (ANW), and the national insurance system for special medical care (AWBZ). There are three categories of income, each with their own tax rates. They are referred to as “boxes” referring to how they appear on the forms.
- Box 1; Income from labour and property;
- Box 2; Income from substantial participation;
- Box 3; Income from savings and investments.
There is a special facility for ‘extraterritorial employees’, the 30% ruling. Please see the resources about the 30% ruling for more information.
Simply stated, the assessment of the income tax is based on the actual wage tax deducted by your employer versus the amount set by the government and allowing for additions/deductions due to private circumstances. If too much tax has been deducted from your salary, you will receive a reimbursement and if too little has been deducted you will need to pay the difference.
For private use of a company car, a percentage of the Dutch catalogue price is added to your income and will be taxed. Depending on the type of car, the percentage varies from as high as 22% to as low as 4% for electric cars up to €50,000.
Formalities when exiting the Netherlands
If you leave the Netherlands, you may be facing some specific tax issues as well. This may involve tax assessments on your accumulated (tax-deferred) pension capital. Although such tax assessments are only collected in specific cases, it is important to seek guidance in advance.