If you worked in any of these countries, you could be due a Tax Refund

Your no-nonsense guide to taxes in The Netherlands

#TaxTipsGeneral #Featured

Are you planning on moving to The Netherlands? If so, you probably haven’t started thinking about your Dutch tax responsibilities yet!

Nevertheless, if you plan on getting a job in The Netherlands, you will have to pay tax! Therefore, it is important to get to grips with the Dutch tax system. 

But we do have good news, at the end of the Dutch tax year, you could be due a big tax refund! Happy days!

At Taxback.com we know that understanding the tax system of any country can be confusing especially when it’s not your home country, it can be even more complicated!

With that in mind, we have created this guide to help you to understand the local tax system and everything that you need to know about your Dutch tax reclaim

Let's get started!

Starting work in The Netherlands

Starting a new job in The Netherlands is very exciting! 

However, there are a number of steps you must take before you begin working in your new role!

Sort out your documents

If you are a non-EU resident, you may have to obtain a residence permit for moving to The Netherlands. 

If you are an EU, EEA or Swiss citizen you do not require a Residence permit. 

However, depending on your country of origin, your employer in The Netherlands may have to apply for a residence permit by itself or a residence permit and a provisional residence permit known as an MVV (Machtiging tot Voorlopig Verblijf). 

An MVV is a visa that allows you to move to The Netherlands and start working straight away. To collect your MVV you need to provide your passport and a passport photo to the Dutch embassy. 

Register in your Local Municipality 

If you’re a non-EU, EEA or Swiss resident, once you receive your MVV, you can move to the Netherlands. 

Within two weeks of your arrival, you must collect your residence permit. 

Within the first five days of your arrival, you should make an appointment to register with your Local Municipality regardless of your nationality. 

When you register you will need the following:

  • An employment contract

  • Any relevant ID - Birth/Marriage Certificate

  • A permanent address in The Netherlands- only if you plan on staying in The Netherlands for more than four months

Once you register, you will receive your BSN (Burgerservicenummer). This is a social security number that allows you to work in The Netherlands. You will then be regarded as a domestic taxpayer and can access healthcare, open a bank account etc. 

Open a bank account

It is important to open a bank account in The Netherlands so you can spend money, get your wages and transfer money.

In order to open your bank account you may need to provide your: 

  • ID

  • BSN

  • Residence permit (not applicable for EU citizens) 

Depending on your chosen bank, you may be required to provide other information/documents like proof of Dutch address.

The Dutch tax system 

If you earn income while working in The Netherlands, you must pay tax on these earnings.

The amount of tax you pay depends on your personal circumstances and various factors, for example, the type of work you do and if you earn other income abroad. 

In the Netherlands, there are three types of taxable income.

These income types are split into three separate boxes:

  • Box 1 includes income from employment and home ownership
  • Box 2 includes income from a substantial interest
  • Box 3 includes income from savings and investments

 

The tax that you owe on the income in the three boxes is levied as one amount with any national insurance contributions owed. This amount is reduced by the tax credits you’re entitled to. 

2021 Dutch income tax rates:

At the end of the tax year, your employer will issue you with a Jaaropgaaf. This is the official government form which shows details of your income and tax contributions during the tax year.

The average Dutch tax refund is €910

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Residency status for tax purposes in The Netherlands

It is important to determine your residency status in The Netherlands before you file your tax return because you need to file the correct tax form.

If you live in the Netherlands for the entire tax year and have registered your Dutch address, you are considered a resident taxpayer.

If you are registered as living at a non-Dutch address and earn income from the Netherlands that is taxable in the Netherlands, you qualify as a non-resident taxpayer

If you have moved in or out of The Netherlands during the tax year, you are considered a migrant. 

If you need help filing your Dutch tax return, contact Taxback.com today!

Qualifying vs non qualifying non-resident

If you live outside of The Netherlands and you pay tax on almost all of your income (at least 90%) in the Netherlands, you will be entitled to the same deductions and tax credits as residents of the Netherlands.

In order to be a qualifying non-resident, you must live in an EU country, in Switzerland, Liechtenstein, Norway, Bonaire, Iceland, Sint-Eustatius or Saba. 

Once you file your Dutch tax return, you must provide The Belastingdienst with a Personal Income Statement signed by the tax authorities in your home country. 

The Belastingdienst is the Dutch Tax Service responsible for collecting taxes and social security contributions.

This will allow The Belastingdienst to determine if you are a qualifying non-resident or not and only applies to EU citizens. 

Non-qualifying non-residents do not have the same tax deductions and credits as residents. 

Tax credits

You can reduce your Dutch tax bill by claiming any tax credits you are entitled to. 

As of 2015, you will only be entitled to deductible items in The Netherlands if you meet all 3 of the following criteria:

  • You live in an EU country, Liechtenstein, Bonaire, Sint Eustatius or Saba, Norway, Iceland, Switzerland

  • You pay tax in the Netherlands on at least 90% of your worldwide income

  • You should be able to submit a personal income statement from the tax authorities in your country of residence

If you do not meet the above requirements you may only be entitled to part of the tax credit. 

However, at Taxback.com we can help with any queries you may have in relation to this, contact us today for your free no-obligation tax refund estimate!

General tax credit

All taxpayers are entitled to part or all of this tax credit. This tax credit is taken into account by your employer when they are withholding tax from your salary. 

The amount that you get depends on your personal circumstances like your income level and insurance/work period. 

The maximum general tax credit in 2021 is €2,837. 

Employed person tax credit

Every working person in The Netherlands is entitled to the employed person tax credit. 

Again the amount depends on your income level and insurance period. 

The maximum employed person tax credit for 2021 is €4,205. 

What is the 30% tax ruling?

The 30% ruling is a great tax advantage for migrants moving to The Netherlands for work. The 30% ruling means you get a tax-free expense allowance for up to 30% of your salary from your employer in The Netherlands. 

The allowance is intended to compensate for the additional costs and expenses that a migrant employee faces when moving to The Netherlands for work. 

Am I eligible for the 30% ruling?

In order to be eligible for the 30% ruling you must meet the following conditions:

  • You work for an employer who is registered with the Dutch tax office and pays Dutch payroll tax

  • You did not live within 150 km from the border of The Netherlands for the previous 16 months out of 24 months at the time you are hired

  • You have been recruited from abroad or transferred for work from another country

  • You as an employee have skills and expertise that are considered scarce in The Netherlands

  • Tax Office have issued a decision showing that you can make use of the 30% ruling

Also, an income standard applies to demonstrate an employee's specific skills and expertise. In 2020, the employee is considered to have specific skills and expertise if they have a taxable annual wage of at least € 38,347, excluding the exemption. 

For employees who have obtained a Dutch master's degree in university education or an equivalent foreign title, and who are under the age of 30, this income standard is € 29,149 excluding the specific exemption.

An exception also applies to employees who conduct scientific research at certain institutions and doctors in training to become specialists: they do not have to meet an income standard.

The most common way the 30% ruling is applied is where the employee and employer agree to reduce the employee’s salary by 30% and in return, this percentage will be reimbursed in expenses.

However, you must still meet the minimum salary requirements after the 30% reduction from your salary.

Health insurance 

If you spend time living and working in The Netherlands, you must get the standard health insurance. This health insurance is known as Zorgverzekering. 

You may also be entitled to claim the health insurance allowance called Zorgtoeslag to help cover part of your insurance costs. 

The amount of allowance you are entitled to depends on your income. 

At Taxback.com, we can check if you’re eligible and claim this allowance on your behalf.

You may be entitled to claim the health insurance allowance if: 

  • You have Dutch health insurance

  • You have Dutch, EU, Liechtenstein, Norwegian, Icelandic or Swiss nationality or have a valid residence permit

  • Your personal/joint income doesn’t exceed a certain maximum amount

  • Your personal/joint amount of savings and investments doesn’t exceed a certain level

The good news is that you can find out what allowance you are entitled to for free with Taxback.com. 

Check out what you‘re entitled to with Taxback.com today!

Filing a Dutch tax return 

You may be required to file a tax return in The Netherlands if you have spent time living and working here. 

You must file a dutch tax return if you receive a letter from The Belastingdienst requesting that you do so. 

The purpose of filing a tax return is to determine if you owe money to the tax authorities or if you’re due a tax refund in The Netherlands.  

If you do not receive a letter but you have income in The Netherlands on which you will owe €45 or more in tax, you must still file a tax return.

You should also file a tax return in The Netherlands if you expect to receive a tax refund of €16 or more, regardless of whether you receive a letter or not. 

The average Dutch tax refund is €910

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What tax form should I file?

If you are a resident taxpayer, you should file the P form. 

If you are a non-resident taxpayer, you should file the C form. 

If you are a migrant, you should file the M form. 

 

When do I have to file a tax return in The Netherlands?

You should file your tax return after the end of the tax year. The tax year in The Netherlands begins on January 1 and ends on 31 December.

The deadline for filing your tax return is 1 May. 

Non-residents and migrants have up until 1 July 2021 to file their tax return. It is strongly advised to file your tax return before the deadline, if you file late you could face fines and penalties from The Belastingdienst. 

The penalties you may face are between €385 and €5514 in 2021. Exactly how much you will be charged will depend on your personal circumstances.

Filing your tax return for a different country can be overwhelming, so why make things difficult for yourself! Taxback can file your Dutch tax return on your behalf. 

We can go back five years when claiming your Dutch tax back, ensuring you are fully tax compliant and receive your maximum legal tax refund!

The average Dutch tax refund is €910

GET YOURS TODAY

What do I need to file my tax return in The Netherlands?

In order to file your Dutch tax return with Taxback.com, you will need:

  • Your Jaaropgaaf or Statement of Earnings
  • Your completed tax pack
  • A copy of your ID/Passport

 

If you are a non-resident or migrant, the following applies to you:

Since 2015 if you live in an EU country, Liechtenstein, Bonaire, Sint Eustatius or Saba, Norway, Iceland, Switzerland and you pay tax in the Netherlands on at least 90% of your worldwide income, you will also need to submit a personal income statement from the tax authorities in your country of residence in order to avail of higher tax credits and deductions

The average Dutch tax refund is €910

GET YOURS TODAY

 

Claiming a tax refund in The Netherlands

Who can claim a Dutch tax refund?

You could be due a tax refund in The Netherlands if:

  • You only worked for part of the tax year

  • You changed jobs

  • You took on an extra job

  • You were granted the 30% ruling – meaning you got a tax-free expense allowance of up to 30% of your salary from your employer

  • Your spouse and children accompanied you to the Netherlands

 

On average, it will take 3-4 months to get your tax refund from Holland once you apply. But ultimately it depends on how busy the Tax Office is.

The average tax refund in The Netherlands is €910. However, the tax refund you receive will depend on various factors like your marital status and if you’re entitled to any tax deductions. 

Dutch Tax Refunds for Posted Employees

If you work or have worked as a posted employee in The Netherlands, you could be due a big tax refund. 

If you are a posted employee from the EU and have an A1 certificate, you only have to make social security contributions in the country from where you were posted

This means that if you spend some time working in The Netherlands as a posted employee, you can remain within the social security system of the country from where you were posted/country of residence of your employer usually.

So therefore, if you have had social security contributions taken from your salary  in The Netherlands, at the end of the tax year you could be due a big Dutch tax refund!

If you are from India, you may have a Certificate of Coverage, this advises that you should stay insured under the Indian social security system. 

The average Dutch tax refund is €910

GET YOURS TODAY

Who can help me with my Dutch tax refund?

You can of course claim your tax back and file your Dutch tax return by yourself!

But why spend hours sifting through paperwork and confusing yourself with Dutch tax forms?

At Taxback.com, our qualified tax experts can help you file your tax return and claim your tax refund!

We have been getting Dutch tax back for years and we're really good at it! You won't have to worry about understanding Dutch tax forms or figuring how much tax you are owed!

We will make sure you avail of every possible allowance and relief to maximise your tax refund! You can use our account Personal Tax Tracker to get updates on your application!

Our highly qualified tax experts at Taxback.com are happy to help you claim your tax refund today!

Why choose Taxback.com?

  • Live Chat team available 24/7 to respond to your queries
  • No Refund, No fee! – We offer a free, no-obligation estimation before you apply! Use our tax refund calculator for the Netherlands now!
  • The average Dutch tax refund for Taxback.com customers is €910
  • You will have your own personal account manager available to help with any queries you may have

 

Key terms and FAQ’s

What is BSN?

The BSN (burgerservicenummer) is the citizen service number for everyone who lives in The Netherlands. 

What is a Jarropgaaf?

The Jaaropgaaf is the official Dutch government form which shows details of your income and tax contributions during the tax year. Your employer will issue you with this form every year.

What is The Belastingdienst?

The Belastingdienst is the Dutch Tax Service responsible for collecting taxes and social security contributions.

How long until I get my Dutch tax refund?

On average it will take 3-4 months to get your tax refund from The Netherlands. However,  it depends on how busy the Tax Office is at the time you apply. 

How much will it cost me to get my tax refund with Taxback.com?

For Dutch tax returns we charge 16.5% + handling fee of the refund received subject to a minimum fee of €50 + handling fee.

What if I lose my Dutch tax documents or I never got them in the first place?

Don’t worry – if you don’t have your payment documents just email your Taxback.com Account Manager to let them know and for a small additional fee we can find them or organise replacements for you.

Can you guarantee I will get the tax refund you estimated for me?

Unfortunately we can’t. 

However, the refund estimation we give you is based on the information you provide us with and the tax rates and laws in The Netherlands, so it’s a pretty good estimation of what you’ll get.

If you have any more questions about Dutch taxes and tax refunds, contact our team at Taxback.com. Our highly qualified tax team is happy to help you!

About The Author

Kate Reville - Marketing Executive @ Taxback.com

Kate creates content for Taxback.com covering top tips to help our readers save on their tax bill! In her spare time, Kate likes travelling, cooking and watching Netflix!

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