HBK expat consultants - A Dutch income tax return: Am I obligated or should I have filed one?

29 May 2020

You may have been living and working in the Netherlands for a while, but have never filed a Dutch income tax return. Do you even have to? HBK expat consultants gives you the answer.

This article is brought to you by our partners HBK expat consultants

You have been living and working in the Netherlands for a while, but you have never filed a Dutch income tax return. You might have heard that the Dutch citizens are filing their tax returns between March 1st and April 30th. Have you been missing important letters from the Dutch tax authorities or is there just no obligation for an expat to file a Dutch income tax return? We will give you the answer!

Is there an obligation?

In the Netherlands, there is an obligation to file a Dutch income tax return if you meet one of the two following criterions:

  1. You have received an invitation from the Dutch tax authorities to file a Dutch income tax return; or
  2. You are aware or reasonably can be expected to be aware that you owe more than € 46 Dutch income tax.

Invitation

In January and February, the Dutch tax authorities send out the invitations to file the Dutch income tax return. It is possible that you have not received an invitation, but if you want to make sure that you have not missed this letter, you can always call the Dutch tax authorities to ask if they have invited you. As a verification you will have to provide your BSN and date of birth.

€46

How can I know if I have to pay more than € 46 Dutch income tax? The average Dutch national will not be able to answer this question. As an expat, it is nearly impossible to know if you owe more than € 46 of Dutch income tax, since you are not familiar with the Dutch tax system. In general, if you just receive wage out of employment and do not have more than € 30,000 as savings and investments, the chances are small that you have to pay income tax. Nevertheless, we always advise you to fill out a tax return, which we will clarify in the following part

If there is no obligation, is it advisable to file a Dutch income tax return?

If you have not received an invitation and you do not owe more than € 46 Dutch income tax, it is still advisable to file a Dutch income tax return, since you could be entitled to a tax refund. This could be the case in the following situations:

  • A bonus payment
  • The purchase of a residence
  • Mortgage interest paid
  • Gifts
  • Alimony
  • Study costs

The tax rate applied on the bonus could have been too high and in the other situations, several costs could be tax deductible. A benefit that you will not receive, if you do not file a Dutch income tax return.

Tax refund in the year of migration

Even without one of the abovementioned situations being applicable, an expat could be entitled to a tax refund in a year of migration, just because of your income out of employment.

If you arrived in the Netherlands during the year and started working for your employer, your employer has withheld Dutch wage tax on your monthly wage. The tax rate of the monthly wage tax withheld however, is based on the annual salary. For example: If your annual salary is € 60,000, the annual wage tax is roughly € 20,000. Every month, your employer withholds 1/12 of € 20,000: € 1,667, based on the Dutch wage tax tables

If you have only worked for half a year in the Netherlands, your income will be € 30,000. If this would be your annual income, the monthly wage tax that should have been withheld is € roughly € 450. Since your monthly income did not change (just the amount of months), your employer still has to withhold € 1,667 based on the wage tax tables.

By filing a Dutch income tax form in a year of migration, you can retrieve this surplus of wage tax withheld. The only difficulty is that in a year of migration, a different tax return form has to be filed: the M-form instead of the regular P-form (for tax residents). The P-form can be filed online, but the M-form has to be done on paper. Luckily, as a tax consultant we can file the M-forms online for you, which will save you a lot of time.

If you migrated to the Netherlands a few years ago and now believe that you have missed quite a tax refund, please note that we can still file your migration tax return up to five years back.

Need assistance?

If you need assistance to determine if you have to file a tax return or if you could be entitled to a tax refund, please do not hesitate to contact us. We can answer your questions and assist you with the filing of the tax return.