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Thursday February 9th 2012

Dutch tax return 2011

Joris Elfrink, tax advisor

Topics

- The Dutch income tax system- Fiscal partnership- Tax credits- Allowances- 30% Ruling- Tax return 2011

The Dutch tax system (1)

General

Living in The Netherlands: resident taxation- Taxation over world wide income and world wide

assets- Tax treaties will avoid double taxation

Living abroad: non-resident- Taxation only over Dutch income: (self) employment

and real estate in the Netherlands - Non-resident can opted for resident status to claim

tax deductions

The Dutch tax system (2)

- Box 1: income from (self) employment, primary residence

- Box 2: income from substantial interest

- Box 3: income from savings and investments

The Dutch tax system (2)

Box 1: income from (self) employment, primary residence

Income- Wages (incl. company car)- Pension payments- Income from self-employment- Income from other economic activities - Periodic benefits (alimony) - Primary residence, owner-rental-value (not in case

of a rental house as primary residence)

The Dutch tax system (3)

Box 1: income from (self) employment, primary residence

Deductions for residents and opted non-residents

- Interest and financing costs mortgage primary home

- Alimony paid to ex-spouse- Child-support payments (fixed amounts) - Education costs- Certain medical expenses- Certain donations

The Dutch tax system (4)Box 1: income from (self) employment, primary residence

Deduction educationThe study was aimed at your current position or your future

position.The total expenses are deductible, except a threshold of €

500.

- Tuition fees- Costs for literature/study/schoolbooks- Computer used for the study (3 year depreciation, 10%

residual value)- Promotion costs (reception, rent for clothing etc.)- Costs of thesis (printing, registration etc.)

Not deductible are costs for loans, living expenses, travel expenses

and in case of promotion: a diner, after party and photo shoot etc.

The Dutch tax system (5)Box 1: income from (self) employment, primary residence

Deduction medical expenses The following specific medical expenses are deductible, only

if theyare not covered by a medical insurance:

- Medical and surgical help- Prescribed medicines- Medical aids (hearing aid, dentures, prostheses)- Travel expenses to visit a doctor or - Prescribed diets- Adjustment to a home or car- Additional home help

You can only deduct expenses exceeding a threshold amount.

The height of the threshold depends on your income.

The Dutch tax system (6)Box 1: income from (self) employment, primary residence

Deduction donationsOnly for payments to a Public Benefit Organisation (ANBI =Algemeen Nut Beogende Instelling)

Ordinary donations: Not deductible 1% threshold of your income

- ANBI- Payments proved by bank statements- “nothing in return”

Periodical donations: Fully deductible (no threshold)- ANBI- Minimum period of 5 years- Drawn up by a civil-law notary- “nothing in return”

The Dutch tax system (7)Box 1: income from (self) employment, primary residence

Tax-rates box 1

Taxable income in euro’s0 – 18.62833.00%18.628 – 33.436 41.95%33.436 – 55.694 42.00%> 55.694 52.00%

In the first and the second bracket of box 1 the national social

securities are levied at a rate of 31.15%.

The Dutch tax system (8)Box 2: income from a substantial interest

Benefits of dividends and gains on sale of one or more shares in a corporation when you hold at least 5% of the shares in this corporation (for example private limited company).

5% shares held by yourself, together with a spouse or children.

Tax rate : 25%

The Dutch tax system (9)Box 3: income from savings and investments

The net assets (assets minus debts) valued on January 1st are deemed to generate a fixed return on investment of 4% per year. This fixed return is taxed in box 3 at a 30% taxrate. Effectively: 4% x 30% = 1.2% taxation over the value per January 1st

For Dutch residents, the taxable base is exempt for € 20.785 per person and € 2.779 per child.All income from investments (e.g. dividends and interest) is as such not taxable. Assets that are intended for daily use are also not taxed in box 3 (car, furniture, etc.).

Non-residents are subject to taxation only on the net value of Dutch assets:- Dutch real estate not used as the primary residence - Profits rights in a Dutch company, unrelated to shares or an employment

Fiscal Partnership (1)

Partners are taxed on individual base. When you have a

fiscal partner you can divide certain deductions. This way it’s

possible to claim a higher tax return.

Conditions Fiscal Partnership- Married- Unmarried but a cohabitation contract (civil-law

notary) and both adults- Unmarried but together a child- Unmarried but registered as partners with a pension

fund- Unmarried but together owner of residential

property

Fiscal Partnership (2)

Fiscal Partnership

If you meet the conditions of Fiscal Partnership you are each other's

fiscal partners (tax partner).

This is not a choice.

Tax credits

There are several tax credits (not all are mentioned).

- General tax credit € 1.987- Labour credit € 1.574 (higher 57 years or older)These are calculated through the net-income of the

employer.

- Combination credit: max. € 1.871; al least 1 child younger then 12 years old and depends on the height of income.

A non-working fiscal partner (or with low income) can claimthe general tax credit, only if the partner pays at least thesame amount of taxes (no more refund, than tax has beenpaid together).

Allowances

There are “allowances” for

- Health care insurance (zorgtoeslag)- Rent (huurtoeslag)- Kids (kindsgebonden budget)- Child care / day center (kinderopvangtoeslag)

The height of an allowance depends on your taxable income,

and the height of the rent/number of kids etc.

www.toeslagen.nl

Requests concerning 2011, apply before April 1st 2012

30% Ruling (1)

The 30% ruling is an expatruling for specific expertise that is scarce

or absent on the Dutch job-market. The expatriate must be an

employee who is hired from another country by an employer.

The employer can, once granted, pay out a tax free allowance of

30% of the salary of the employee. This allowance will cover the

extra territorial costs.

The 30%-ruling is only on request applicable. The employer must

reduce the gross salary to 70% and on top a tax free remuneration

of 30% can be paid.

It is not possible to claim the 30% ruling in your tax-return.

30% Ruling (2)

Conditions for the 30% ruling (2012)

- The employee is recruited from abroad;- The employee did not reside within 150 kilometres from

the Dutch border at the time of hiring.- The employee's gross salary (inclusive of the tax free

remuneration under the 30% ruling) is at least € 50.000 per annum;

- The maximum duration of the 30% ruling is eight years;- Any period spent in the Netherlands over the last 25 years

will be used to reduce the maximum duration of the 30% ruling.

30% Ruling (3) PHD graduates and masters graduatesPHD and masters graduates who are hired within a year of completing their studies will benefit from a relaxation of

rules: - The minimum salary requirement is € 38.007 gross

(inclusive of the net remuneration under the 30% ruling (€ 26.605 younger than 30 years)

- In the case of the PHD being completed in the Netherlands, the requirement of "being recruited from abroad" will not have to be met.

PHD students can also opt for the 30% ruling (depending the

research institution).

Scientific researchersThere will be no minimum required salary for scientific

researcherswho are employed by a university and/or a research

institution thatis subsidized by the government.

30% Ruling (4)

Scarcity on the labour market in 2012

The requirement regarding scarcity on the labour market, which was an important criterion under the ruling valid until the end of 2011, will be deemed to be met if the minimum salary requirement is met.  

Check your labor agreement and/or contact Human Resources Universiteit Twente.

Tax return 2011 (1)

Why should you declare a tax return?

- Interest on mortgage results in a pay-back off taxes- Deductions results in a pay-back off taxes- Immigration (i.c. with employment income) results

in a pay-back (temporary social secured).- Fiscal partner had no or a low income: refund off the

tax-credit

Tax return 2011 (2)When and how should you declare a tax return?

When you receive a tax-form from “De Belastingdienst”: Always

declare the tax-return! You received no tax-form: voluntarydeclaration is possible.

When: before April 1st 2012: the refund will be paid before the

July 1st 2012. No return or to late: penalties/fines are possible.

How: Residents: tax return program “De Belastingdienst”, you

need tohave DigID. Non-residents: tax return program “non residents”

(electronicsignature). Immigrants: tax return on paper M-biljet (will be send to you

by “DeBelastingdienst”)

Tax return 2011 (3)

How should you declare your tax return?

OR BE SMART:Contact

Jongbloed Fiscaal Juristen N.V. Oldenzaalsestraat 125

7514 DP Enschede

info@jongbloed.tv

+31(0)53 432 72 00

Questions

?

Jongbloed Fiscaal Juristen N.V. Oldenzaalsestraat 125

7514 DP Enschede

info@jongbloed.tv

+31 (0)53 432 72 00