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Deadline personal income tax return 2017 & be aware of interest

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Now that the year 2017 has ended, it’s time to prepare for the Dutch personal income tax return 2017! Although the Dutch tax office has recently stretched the filing deadline in the Netherlands from April 1st 2018 till May 1st 2018 in the so called aangiftebrief 2017, it could be interesting to file your 2017 personal income tax return before April 1st 2018.

In case you have to pay additional personal income tax on your personal income tax return 2017 be aware of the accruing interest (‘belastingrente’) on the amount on tax due following the 2017 personal income tax return. The tax office may start calculating interest as of July 1st 2018 in case no personal income tax assessment over tax year 2017 has been imposed yet.

The tax authorities have three months to impose a personal income tax assessment 2017 after having taken receipt of a personal income tax return 2017. During this 3 months period they retain the right to charge interest on the tax amount due following the 2017 personal income tax return.

Since the interest rate is fixed at 4% on annual basis, this interest rate is well above any interest percentage you may expect to receive on a Dutch bank current account / savings account.

Additional personal income tax may be due e.g. in case of savings held above the applicable thresholds or other taxable income which was not yet taxed, e.g. by means of wage tax and/or a preliminary tax assessment.

Another possible reason to file your personal income tax return 2017 before April 1st 2018 is that the tax authorities ‘guarantee’ a reply (mostly by way of a personal income tax assessment 2017) before July 1st, 2018. This could be especially interesting in case of an expected tax refund, e.g. in the year of migration (immigration or emigration).

We can assist with the full process to file your personal income tax return. If needed we can arrange for a lengthy filing extension of your personal income tax return 2017, however be aware that the possible interest calculation will not be extended by the tax authorities.

Some brief additional information on the Netherlands Dutch personal income tax system can be found here.

 

 

 

 

Tax deductible study tuition expenses 2017 / 2018 / 2019 / 2020 / 2021

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Tax deduction / deductible study tuition fee expenses. Study tuition costs are expenses made for education to obtain a (better) position on the labour market or to maintain current work-related knowledge.

The following costs can be deductible: tuition / application fee, enrolment fee, books and other literature and costs of exams. Costs of a language course can be deductible but only under certain strict conditions. Study costs have to be a financial burden for the person following the studies, meaning the fees may not be paid through a gift and/or scholarship(s). … Read More

Fill in a tax return over the year of migration and – in most cases – receive a tax refund!

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In most cases a tax and premium benefit can be achieved in the year of migration, either moving to or moving out of the Netherlands. As to the premiums this benefit follows from the fact that premium can be calculated on a time related basis.

This in practice means that per month no more premium can be due than 1/12 of the maximum annual premium. When the taxable income on annual basis is higher than appr. EUR 34,000, this time related method may well offer a benefit.

As to the tax part; employers calculate the wage tax due on annual basis and divide the outcome over 12 months. … Read More

Alternatives for Dutch equity taxation – Box 3

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Future of box 3 (tax on deemed income from equity)
From the 1st of January 2017 the Dutch equity tax of the so called box 3 changes. In effect, the tax burden on higher amounts of net wealth will be increased while the tax burden on lower amounts of net wealth will be decreased. The tax free amount will be € 25,000 per person.

Then, on the first € 100,000 of net wealth a deemed return on investment of 2.87% will apply. This percentage is said to be based on the average interest rates of the last five years. For the next € 900,000 the deemed return is 4.6% and for amounts of net wealth above 1,000,000 the deemed return on investment is 5.39%.

This system is advantageous for those who achieve a relatively high return, but at the same time it’s really unfavorable if the actual return is low.

How to avoid box 3-taxation?
It is possible to avoid this box 3 taxation. … Read More

Decree tax exemption box 3 income (income from equity) for non qualifying foreign tax residents

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The Dutch Supreme Court gave its judgement in the cases J.B.G.T. Miljoen (ECLI:NL:HR:2016:362) and Société Générale S.A. (ECLI:NL:2016:361), after some preliminary questions to the European court of justice about portfolio shares. The Dutch State Secretary of Finance decided to change the appliance of Dutch law according to the Supreme Court’s judgement. … Read More