With the Dutch tax return deadline coming up on 1 May, it’s a good idea to brush up on the past and coming years’ changes to the tax code.
Expat tax expert Lennart Suurmond of JC Suurmond Tax consultants shares his top tips for getting your affairs in order this year to file a Dutch tax return.
J.C. Suurmond Tax consultants provide tailor made advice and personal guidance on tax matters. With over 30 years experience, the organization is a fully-developed tax advisory office, for both private individuals and companies.
2019: a new Dutch tax system
The new Dutch tax system introduced this year could have significant effect on the rate of tax you pay, as well as any rebates or deductions you’re entitled to. While you won’t feel the effects of some of these changes for a while, it can help to get ahead of the game.
How to submit your Dutch tax return
In theory, you can submit your tax return any time from 1 March until 1 May – though it is possible to request an extension at any time before this date. Usually, if you request an extension to file your Dutch tax return, you’ll be given until 1 September. Tax advisers can generally request more time on top of this.
Lennart Suurmond says that “if you’re not sure whether you need to file a Dutch tax return, it’s worth checking, as there are ways you might be able to benefit from the tax system. It’s also possible to file a Dutch tax return retroactively for up to five years”.
Filing US taxes from the Netherlands
Despite the fact that every US citizen and green card holder is required to file a tax return with the IRS even when living abroad, many expatriates still fail to do so. Many are unaware of these obligations, thinking that as an expat they do not need to pay or file tax returns in the US. You do, however! For more information and help filing your US tax returns from the Netherlands, contact Taxes for Expats and see our guide to taxes for American expats.
Reduction in Netherlands income tax brackets
Previously, the amount of income tax you’d pay in the Netherlands was assessed across four brackets. This was reduced to three in 2019, and will drop to two in 2021. This means income tax rates are as follows:
- Up to €20,384: 36.65%
- €20,384–€68,507: 38.1%
- €68,507+: 51.75%
- Up to €68,507: 38.1%
- €68,507+: 51.75%
“It’s not yet clear how social security contributions and other deductions will be calculated under the new rules. It may be that the government brings in a separate bracket for such premiums,” adds Lennart.
30% ruling reduced from eight to five years
The period of the 30% ruling has now been reduced from eight to five years.
Lennart says: “Remember to think about how the 30% ruling affects your assets. For example, if your partner makes use of it, you’ll only need to declare your Dutch real estate assets. Should the ruling come to an end, however, you’ll have to declare any foreign assets, too. Keep on top of your tax responsibilities; remember that if you own foreign property, you could request a double deduction in taxation”.
Further reduction in mortgage interest deduction
The mortgage interest deduction will decrease by 3% a year until it reaches the proposed new tax rate band of 37.05% in 2023. This year, you can deduct your mortgage at a maximum rate of 49%.
Upcoming changes to Dutch corporate tax
Dutch corporate tax rates are currently at 19% and 25%; although, these rates are set to reduce in the next couple of years.
The standard rate will be reduced to 22.55% in 2020 and 20.5% in 2021. The lower rate will decrease to 16.5% in 2020 and to 15% in 2021.
“While these changes will be phased in over time, they should make the Netherlands more attractive to foreign companies considering moving over here,” says Lennart.
Lennart Suurmond completed several fiscal studies and joined J.C. Suurmond Tax consultants in 2003. J.C. Suurmond was established in 1986 by his father and the company’s focus has always been on service and results. Tax advice, tax returns, international income and assets, advice re immigration are the main fields where Lennart has experience.Contact J.C. Suurmond