It’s that time again: the Dutch tax return for 2023 can be filed again! For many expats residing in the Netherlands, completing their tax return seems an easy job, due to the pre-filled data in the tax return. However, these pre-filled data are often incomplete or even incorrect. It is important to always check these thoroughly and change or adapt the details if necessary. Here are some key points to keep in mind for your tax return 2023 Netherlands.
International
For example, if you have assets abroad, there is a possibility that this information is not included in the pre-filled return. Or perhaps you lived abroad for a part of 2023. In this case, an M-form must be completed. It is easy to overlook tax benefits and optimisation opportunities in this tax return. Did you have a foreign employer and did you travel back and forth for your job? Then it is important to ensure that the 183-day rule is correctly applied in your situation and that you do not pay double tax.
Especially if you have international aspects in your situation, it is wise to have a tax advisor take care of the tax return 2023 who has experience with cross-border situations.
Tax interest rate increased
Whether you have international aspects to your tax return or not; it is wise to request a provisional assessment if you are expecting to pay a large due amount. This prevents tax interest being due; this is particularly important because a high tax interest rate of 7,5% will apply as of July 1st 2024.
We can assist you and request a provisional assessment on your behalf.
Foreign bank accounts in pre-filled returns
Is there a foreign account visible in your pre-filled return? The balance of foreign accounts is usually not visible in pre-filled returns. If an amount was present in the account in the last 12 years and this has not been included in your box 3 assets previously, it is wise to correct this on your own initiative. If you do not declare foreign assets, you risk a fine that can amount to 300%. Contact us and describe your situation – we will be happy to help.
Minimize wealth tax Netherlands
Once your 30% ruling terminates, you’ll be subject to regular Dutch taxation on your global wealth (Box 3 tax), which means declaring it correctly in your tax return is necessary, to avoid hefty penalties.
30 % ruling and forgot to opt for non-domestic taxation?
If you have the 30% ruling as an expat in the Netherlands, then you don’t need to declare your foreign assets. However, there have been some changes as to the 30%-ruling. This favourable ruling has been further restricted, being decided just before the elections end of last year.
The partial non-resident tax liability in combination with the 30% ruling is no longer possible. Existing 30% rulings are subject to transitional provisions, allowing the partial non-resident tax liability to remain possible until 2026. Additionally, the percentage of income benefit is being phased out. Starting from January 1st 2024, for 20 months, 30% of the salary remains tax-free. For the subsequent 20 months, a percentage of 20% is tax-free, and for the following 20 months, 10% is tax-free. For existing cases as of January 1, 2024, the old rule remains in force for the entire duration.
Be ahead and contact us on time about your tax return 2023 Netherlands! Get in touch today.
If the Tax Office issues you with a tax form or letter to request you to do so, this will have to be filed in any case. If you do not receive a letter, but you have to pay additional tax on your income or assets, you are also obliged to file a tax return. Obviously if you are entitled to a refund, it is in your own interest to file one. For a regular domestic tax return the deadline is May 1st. For a migration tax return (M-form) the deadline is July 1st. For both forms extension can be requested.
This year again we have heard of tax payers who received a letter from the Dutch tax authorities mentioning that they did not need to submit a tax return, although in their particular situation it would have been either mandatory to file a tax return, or they were entitled to a refund. Particularly the situation of someone living abroad owning Dutch real estate, we regularly see that no tax returns were issued or filed. As property is always taxable in the country where it is located, it is important that a tax return is filed, also in view of avoiding later corrections with penalties and interest. Furthermore the Tax Office in the main is not aware of your possible tax deductions. We therefore advise to have your refund possibilities checked.
The Tax Office has also mentioned that some details in the prefilled tax return may be incorrect, such as the life annuity premiums. It is always important to check the figures with the underlying documents. By the way, any electronic messages you receive from the Tax Office (Berichtenbox) are still also sent by regular mail.
If you own any cash money as per 1st of January 2023 that exceeds the threshold of € 596,– (€1.196,– for fiscal partners), it must be declared in box 3. For 2023, this is mentioned in asset category 1, which means it is taxed at the same rate as bank accounts.
As previously communicated, from 2023 onwards the correction that was possible based on the rented status of a second property will be limited. Whereas until 2022, depending on the level of rent, the value could be reduced to maximally 45% of the WOZ-value, from 2023 onwards this will be a minimum of 73%. If you would like to know how this will work out in your situation, please contact our office.
These adjustments, together with the higher box 3 levy for real estate, mean that a house in box 3, whether rented out or not, will be taxed more heavily from 2023 onwards. It may therefore be advisable to request a higher provisional assessment. Do you have any questions about this? Contact our office and we will be happy to look at the options with you.
Also, it is proposed that the Box 3 tax will be adjusted again in 2027, based more on actual return on investment instead of fictitious return on your assets.
In the 2022 tax return it was still possible to choose between the new and the old system of box 3 levy. From 2023 onwards this choice is no longer possible which means the new levy is applicable. In this levy, bank accounts are taxed at a lower rate than other assets. The Tax Office assumes a fictitious return on the asset categories; for bank accounts this is 0,92% and for other assets this is 6,17%, and debts reduce this return with 2,46%. The tax-free threshold is calculated with a weighted average rate based on the breakdown of your assets into the different categories. Subsequently the net return is taxed at 32%.
There are still a number of uncertainties regarding the Box 3 levy, including the calculation of the double taxation in the case of foreign real estate. In addition, further court cases are ongoing regarding the consequences and practical effect of the Supreme Court ruling. We are closely monitoring developments and raising appeals where necessary.
We use Secudoc to guarantee the safe transfer of larger files and documents. If you want to send your files via Secudoc, please send us a request by email. You will then receive an email with a link that leads to the Secudoc upload page. After you upload your files, we can download your uploaded files only by using two-step verification. This provision is especially practical with a larger number of attachments or large files that cannot be sent in one e-mail.
The following deductions are available in the 2023 Income Tax return to reduce your taxable income:
Deductions
mortgage interest of your first residence (owner-occupied home)
life annuity premiums (if deposited before 1st July 2024)
non-reimbursed health care expenses (including medical assistance, prescribed medication and travel expenses for hospital visits)
financial obligations to ex-spouse i.e. in the form of alimony
gifts or donations to recognized charities (refer to the ANBI list)
travel expenses for regular commuting by public transport
weekend expenses for taking care of disabled relatives
With the changes to the box 3 system it is important to keep your home in The Netherlands outside of box 3 if possible. Under certain conditions it is possible to keep the property in box 1. For 2024, the rate in box 3 will be increased from 32% to 36%.
If you live in the Netherlands, it is reasonably straightforward: if you live in your house yourself, the property is taxed in box 1. But if you leave the Netherlands, what happens then? There are a number of options.
Sale
Many taxpayers think that they will have to sell their home if they leave the country. Of course, it is true that you will have less to worry about. You no longer have to spend money and time on maintenance, taxes and insurance.
Rental
If it is decided not to sell the house, renting it out is usually the next option. But currently this is not very favourable in view of the box 3 changes. Renting out your home has become less profitable due to the high box 3 rate. In addition, the favourable ‘leegwaarderatio’ has been considerably restricted which further reduces profitability of rental properties. This scheme allowed real estate to be declared at a lower value under certain conditions.
And the other option?
What many people do not realise is that there are often possibilities to keep the house in box 1, even after leaving The Netherlands. Even if the house is no longer your main residence. For example, as long as the house is empty and intended for sale, the house can be declared in box 1 until it is sold. However, this means the house cannot be rented out. However, you can still make use of mortgage interest deduction.
Furthermore, if you emigrate temporarily and keep the home for your own use, it can sometimes be kept in box 1. There are a number of conditions for this. For example, you must have owned the home for at least 1 year before moving out of the Netherlands. In addition, no one else may register themselves on the address (there are a number of exceptions to this). We would be happy to examine your situation to determine whether you are eligible for this scheme.
The 30 percent ruling – a financial gem that grants you tax-free 30 percent of your salary tax-free for five years. Dubbed the “30% tax facility,” this enticing benefit extends its reach to not just employees, but entrepreneurs as well, thanks to a clever loophole. A beacon for skilled migrants, the 30% ruling boasts magnetism and, yes, a touch of controversy.Yet, this advantage isn’t an open door for every expat in the Netherlands; it rests upon a checklist of conditions.
Click here if you want to see if these conditions apply to you. It is a big turn of events for an expat to bid farewell to the 30% ruling.
Without the 30% ruling, you can no longer opt to be considered as a partial non-domestic taxpayer. In other words, you will be treated as a full resident tax payer and you will need to be declaring foreign assets in your Dutch tax return.
Declaring foreign assets Netherlands
So if you own a second home, shares, bank accounts cryptocurrencies, NFTs, or investments, they will need to be declared in box 3. If the total sum surpasses the tax-free threshold (€50,650 per person in 2022), you will need to declare them in your annual income tax return under Box 3. Conversely, you can offset debts like a student loan or secondary home mortgage. Moreover, after your 30% ruling has ended, dividend from a major shareholdership is taxable under Box 2.
What actually is box 3 ?
Box 3 tax applies to your worldwide net wealth – savings, investments, and real estate. Taxation isn’t on asset income or gains but on an estimated yield derived from the asset value. From 2027, a new system will replace current box 3 taxation, annually taxing regular income and asset value growth, i.e. capital gains.
Basically, The Dutch wealth tax, also known as Box 3 tax, taxes notional income from savings and investments. It’s currently undergoing changes and applies to assets as of 1 January. A recent High Court decision has led to the temporary suspension of Box 3 tax assessments. It’s advisable to await clearer guidance on reducing Box 3 tax before taking action. The High Court emphasized that the assumed investment returns can pose a significant financial burden, especially for those with savings.
Minimize wealth tax Netherlands
Once your 30% ruling terminates, you’ll be subject to regular Dutch taxation on your global wealth (Box 3 tax), which means declaring it correctly in your tax return is necessary, to avoid hefty penalties.
30 % ruling and forgot to opt for non-domestic taxation?
Even if you’re still under the 30% ruling but haven’t chosen partial non-domestic taxation, your (worldwide) assets in Box 3 must be declared. Dutch property, excluding your primary residence, is always taxable in box 3, even during the 30% ruling. Ensuring correct partial non-domestic taxation opt-in is advised, as errors are common. If you’ve overlooked this which is not uncommon, we can assist in clarifying your tax obligations.
“Dutch property, excluding your primary residence, is always taxable in box 3, even during the 30 ruling“
It is wise to let one of our experts have a look at your situation if your 30 ruling is ending. Imagine a scenario featuring a German expat whose 30% ruling concludes on January 1st, 2021. As her non-domestic taxpayer status ends, she will have to pay Dutch box 3 tax for her worldwide assets. On savings in Germany, Dutch box-3 tax is now applicable. Our tax specialists can aid her in crafting strategies to mitigate her tax obligations. One option involves reallocating savings to partially repay her Dutch mortgage, resulting in reduced box 3 tax liability, though accompanied by diminished mortgage relief. This not only cuts down the mortgage interest but also lowers savings, translating to decreased box 3 taxation.
As you may have heard in the press, the Supreme Court ruled on 24 December 2021 that the box 3 tax based on a fictitious return on investment in 2017 and 2018 is disproportionately high and is therefore in violation of the European Convention for the Protection of Human Rights (ECHR). The Supreme Court ruled that a relatively heavy financial burden is attached to the choice not to go into risky investment of assets.
Furthermore, the fixed asset mix introduced in 2017 has a discriminatory effect on those who have had bad luck with their investments and nevertheless are taxed relatively heavily. That is why the Supreme Court offers legal redress in the sense that for the years 2017 and 2018 the tax should be based only on the actual return on investment. After the negative court decisions for earlier years, this finally means a positive outcome for the tax payer with saving accounts and hardly any interest.
Decision in mass appeal procedure
At the beginning of February, the Tax Office published the collective decision in the mass appeal procedures against the box-3 tax for 2017 to 2020. All 200,000 appeals have been allowed. This does not yet mean that the participants in the mass appeal procedures now know how much they will get back and when. Neither is anything known about possible compensation for other taxpayers who did not appeal against the box-3 levy. The cabinet has promised to provide a substantive response no later than 1 May 2022 on how restoration of rights can be offered over the past few years. For most situations involving a substantial box 3 tax, we have already raised appeals over the past few years. Further action is only meaningful after we know more about the promised response from the Tax Authorities.
New box 3 levy
According to the cabinet, a box 3 levy based on the actual return on investment cannot come into effect until 2025. However, emergency legislation to adjust the box 3 levy is currently being worked on, which should provide a solution for the intervening years. This could include, for example, fictitious interest rates that are more in line with the actual returns and based on the actual composition of the assets. The cabinet is planning on sending a memorandum of direction for the recovery operation to the parliament before 1 April 2022.
Moreover, it is clear that a new system will certainly not lead to advantages for all taxpayers. Taxing actual returns can also mean taxing capital gains from securities and real estate, which have not been taxed as such until now. Besides, a number of parties state that the coverage for the measures should come from the same category of taxpayers.
Future assessments and tax returns
The ruling of the Supreme Court has consequences for 2021 and later years too. No final assessments are currently sent to taxpayers with box-3 capital. An exception will only be made if prescription is imminent or if there is an interest in the taxpayer. As soon as it is clear what the recovery will look like, these assessments will be issued. Taxpayers will be informed about this.
The Tax Office asks taxpayers to pay the provisional tax assessment 2022. They are also asked to simply submit the 2021 tax return, stating the box-3 capital as before. Possible compensation will be worked out later. Taxpayers with box-3 assets will probably receive their assessment for 2021 after 1 July 2022, even if they have submitted their 2021 tax return before 1 April.
Beheer cookie toestemming
Wij gebruiken technologieën zoals cookies om informatie over uw apparaat op te slaan en/of te raadplegen. We doen dit met als doel om de beste ervaring te bieden en om gepersonaliseerde advertenties te tonen. Door in te stemmen met deze technologieën kunnen wij gegevens zoals surfgedrag of unieke ID's op deze site verwerken. Als u geen toestemming geeft of uw toestemming intrekt, kan dit een nadelige invloed hebben op bepaalde functies en mogelijkheden.
Functioneel
Always active
De technische opslag of toegang is strikt noodzakelijk voor het legitieme doel het gebruik mogelijk te maken van een specifieke dienst waarom de abonnee of gebruiker uitdrukkelijk heeft gevraagd, of met als enig doel de uitvoering van de transmissie van een communicatie over een elektronisch communicatienetwerk.
Voorkeuren
De technische opslag of toegang is noodzakelijk voor het legitieme doel voorkeuren op te slaan die niet door de abonnee of gebruiker zijn aangevraagd.
Statistieken
De technische opslag of toegang die uitsluitend voor statistische doeleinden wordt gebruikt.De technische opslag of toegang die uitsluitend wordt gebruikt voor anonieme statistische doeleinden. Zonder dagvaarding, vrijwillige naleving door je Internet Service Provider, of aanvullende gegevens van een derde partij, kan informatie die alleen voor dit doel wordt opgeslagen of opgehaald gewoonlijk niet worden gebruikt om je te identificeren.
Marketing
De technische opslag of toegang is nodig om gebruikersprofielen op te stellen voor het verzenden van reclame, of om de gebruiker op een site of over verschillende sites te volgen voor soortgelijke marketingdoeleinden.
