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The word 'belastingdienst' is enough to make many expats shudder. But does doing your taxes have to be such an ordeal? |
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Be aware that there are a lot of negative assumptions going round in expat circles regarding cross-border tax law, so make sure that you are professionally informed by a tax expert who has a reputation for dealing effectively with such issues.
For instance, one reader of non-EU origin sent in a remark regarding his visa saying that claiming social security benefits could harm his rights to stay or work in The Netherlands.
He was shocked by the idea that he is obliged to pay social insurance premiums, and had heard that he risked being deported as soon as he claimed the relevant benefits.
One of our tax experts, Frank de Bats, answered, "Even though this is not my primary field of expertise, I have researched and fortunately, I understand this is not at all true.
"Indeed, foreigners working in The Netherlands are obligatorily insured under our social security system and obliged to pay premiums via a withholding system. This unless they are insured elsewhere further to a Treaty or European Ordinance, or if they are exempt under Dutch Decree-laws. And in any case, when they fulfil the conditions, they can claim social security benefits, such as for disablement, old age, unemployment and such like, all without consequences for their visa.
"However, there is one exception. Generally speaking, Immigration Law applies the principle that foreigners can be admitted under conditions, one of which is that they dispose of means of existence. When a foreigner staying on a visa has exhausted all rights to benefits for which they have paid premiums as well as their own means of existence, he or she may fall back on welfare (bijstand).
"This is a social security benefit financed from general public means rather than premium-fed funds. I understand that only if welfare (bijstand) is claimed, such may have consequences for the visa."
Should you have any questions regarding taxation in the Netherlands which haven't already been answered in our previous tax Q&A's (see the list of related articles), don't hesitate to send them in with 'Ask-the-experts tax Netherlands' in the subject line to feedback@expatica.com.
17 October 2007
Natasha Gunn
Editor
Expatica Netherlands
[Copyright Expatica 2007]
It is often possible to legitimately build up tax free savings outside of one's country of residence on the basis that when such savings are realised for value the individual is either in a low or non tax position or is in a location where taxes on savings are exempt.
A fee free professional advisory service is available by contacting myself as CEO of my own Company with some 35 years of relevant experience.
Dear Sir,
I am a resident of Netherlands, and have the 30% rule. If I have income generated from a property sold in Romania - is this going to be taxed in Netherlands?
Thanks!
As Romania is in the EU you will not face any possibility of paying tax twice on the net gain on the sale of your Romanian property. You need to check whether the Romanian tax authorities are going to tax you on the net gain. If they do then the Dutch "tax man" might not tax at all or "he" might apply some tax if the Dutch Capital Gains tax rules should call for a higher rate of tax than Romania. But on the basis that the total tax payable would not exceed the applicable rate within the dutch system. But check what level of exemptions might exist. One's country of residence is where your liability on your worldwide assets will normally vest! When selling a property if it is your only property ( eg. currently renting in the Netherlands ) then you might find that the "rules" are such that you pay no tax at all! If you do have liability do ensure that you seek allowance for any costs ( repairs, improvements etc ) that you have incurred on the property being sold. Usually (if there is a liability to tax ) you will find that you can deduct from the sale price, all legal costs, agents fees, repairs etc etc. Then you will only be taxed on the net profit and that is also often ameliorated by an annual exemption. So you need to do your 'homework' vis a vis the Romanian and Dutch tax systems as they apply to your own personal set of circumstances!
Kevin, if Alina Petre has the 30% ruling, then I do not think he is required to pay tax in Holland on any overseas investment proceeds, including the sale of a house in Romania. He may have a tax liability in Romania, however, but I thought the rules in Holland are very straightforward for "30% rule expats" in respect of overseas investment income not being taxable in Holland. He should obviously get my opinion confirmed by a professional tax advisor, but please correct me if I am missing something here.
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