Spring is coming and that means one not-exactly joyful thing in the Netherlands – it’s time to file your tax return.

The Belastingdienst tax office is open for filings on 2023 from March 1, 2024. Your declaration needs to land in its system by the date on your tax demand or, if you haven’t had one, before July 14. It’s in your best interests to get started right now, according to tax expert Blue Umbrella, which advises international clients.

“The normal deadline is May 1 and it’s always best to meet that,” said a Blue Umbrella tax expert. “But you can also ask for a three month extension, free of charge, so you should do this right away.”

First steps

There are no radical changes to taxes for 2023: the basic tax on income was reduced very slightly to 36.93% and the top tariff for income over €73,031 in the year remains 49.5%. People in employment get a slightly higher tax free allowance but freelancers get less. A property you live in is also counted in this “Box 1” income: there’s a tax on having your own home of 0.35% for homes valued at up to €1.2 million and 2.35% of homes above this value.

But you can also currently claim partial relief for the interest paid on your mortgage.  Although mortgage interest rate relief has been reduced for 2023 to 36.93%, the lowest tax rate, it is beneficial to work out whether one financial partner or the other should claim it – ask your accountant to check.

This year, corporation tax is higher, as is the levy for people with a large dividend pay-out and more than 5% of shares in a firm (Box 2). “These things aren’t to the benefit of people with a B. limited company but overall, it’s probably a marginal change,” said the Blue Umbrella expert.

You should also report your global income and wealth in the Netherlands if you are tax resident here. The first €57,000 of wealth is tax free, then there is a 32% tax based on a government estimate of how much your additional wealth is earning (Box 3).

Foreigners

If you migrated to the Netherlands during 2023, the government might not ask you to file a tax return but it is probably in your interests to do one: your employer will have deducted tax from your salary as though you were earning for the whole of the tax year. “You will probably get a refund, so make sure you file your tax!” said the expert. “Probably too much tax was taken off, and if you do it in time, you will get your refund for your holidays.”

Another mistake foreigners sometimes make is to think that if they are resident in the Netherlands, a company set up elsewhere only needs to be reported in that country. This is not the case. If you pay tax in the Netherlands, you need to declare all of your worldwide income and it will be tested against dual taxation treaties to see which government takes a cut and which might give a rebate.

“This is the biggest mistake we hear about,” said the Blue Umbrella advisor. “People sometimes started a company abroad but are living here and work remotely. They think because the company is located abroad, they don’t have to report it.”

The one exception in reporting global wealth – for 2023 only – is for people with a 30% ruling who can choose to be partially tax resident elsewhere: this means that wealth can be taxed in its actual location. Property is generally also taxed where it is located, but should be reported.

Those recruited to the Netherlands with the 30% ruling, from this year, will get 30% of their income tax free for 20 months, then 20% tax free for another 20 months, then 10% for another 20 months – after a parliamentary vote to cut back on this benefit last autumn. The top salary for the perk is now €233,000, the top civil servants’ pay.

Tips and tricks

If you want to take advantage of tax deductions from your business for electric vehicles – the MIA/Vamil scheme – make sure you file for these within three months of your purchase. Electric cargo bikes are permitted still for 2023.

Have an expert check whether any expenses you are proposing for your business are allowable under the Dutch tax system – different countries have completely different norms so don’t make any assumptions.

And the top tip is to file your tax early! “We aim to do it for you within five working days, although at the end of the season it can take up to two weeks,” said the Blue Umbrella expert.

“We always ask for a three month extension for everybody. But be sure to start right away because if you do it at the last moment, there’s a question and you’re two weeks further suddenly.” And beware – if you ignore warning letters from the Belastingdienst you might get a fine…and any money still owing on May 1 will also be charged interest at an eye-watering 6%.

To request a free tax extension or for cost-efficient tax services, contact Blue Umbrella