In the Netherlands, capital gains and actual rental income on a property are currently not taxed. Instead, the Dutch tax authority assumes a fixed yield of up to 6.04% on your total asset value as per January the first, regardless of the actual return on your assets. However, this system is set to change soon, as the government soon plans to transition Box 3 into a system in which the actual return is taxed, including capital gains.
What will the new system look like?
Under the new box 3 system, which is expected to be introduced in 2026, unearned income such as interest, dividends, and rental income will be taxed annually. Additionally, tax will be levied on changes in the value of assets, including capital gains or losses on shares and appreciation or depreciation of property values.
What is the difference to the current system?
Currently the Tax Office assumes a fixed fictitious percentage of your wealth to be unearned income. A distinction is made between three different categories; these are bank accounts, debts, and other assets. For 2024 the fictitious yield is 1.03% for bank accounts, 6.04% for other assets, and 2.47% for debts. On this yield, 36% tax is due.
This system can be advantageous if you have assets with a high return (higher than the fictitious return) as you only pay tax on the lower fictitious return. However, if your assets have a lower return, the tax can be disproportionately substantial. In the new system this will no longer be the case, and you will be taxed on your actual income and capital gains.
What about the tax-free threshold?
It is expected that instead of a tax-free wealth threshold in Box 3, there will be a tax-free income threshold instead. Income from assets that exceed this exemption will be subject to taxation.If you would like to inquire about the latest box 3 developments and how your assets and unearned income are taxed, please contact us and we will be glad to advise you!
In the Netherlands, Budget Day, known as Prinsjesdag or ‘Prince’s Day,’ takes place on the third Tuesday of September. During this event, the King delivers the Speech from the Throne, which officially marks the opening of the parliamentary year. The speech outlines the goverment’s main plans and priorities for the upcoming year.
Third Tuesday in September
Initially, Budget Day (Prince’s Day) was held on the first Monday in November, and later moved to the third Monday in October. However, this schedule didn’t provide Parliament with sufficient time to finalize the national budget before the January 1 deadline. As a result, in 1848, Budget Day was rescheduled to the third Monday in September. Not everyone, however agreed with this change! Members of parliament living outside The Hague needed to begin their journey on Sunday to arrive on time, which was particularly problematic for Protestant politicians who objected to traveling on a Sunday. Consequently, in 1887, Budget Day was moved to the third Tuesday in September.
Bit of history
The name Prince’s Day (Prinsjesdag) originates from the 18th century during the time of Prince William V, whose birthday on March 8th was celebrated as Prince’s Day. During the French occupation, supporters of the House of Orange-Nassau expressed their loyalty by continuing to celebrate this day.
The exact reason why the name Prinsjesdag was later associated with the opening of Parliament remains unclear. Despite this, it continues to be a day for people to show their affection for the royal family.
Budget day
So what actually happens on Budget Day? On Budget Day, the King will travel in the Glass Coach to the Royal Theatre in The Hague, where ministers, state secretaries, members of parliament, and other guests will be gathered. Since 1904, the head of state (the King or Queen) has traditionally delivered the Speech from the Throne in the Hall of Knights, outlining the government’s main plans for the upcoming year. Following the speech, the Minister of Finance presents the House of Representatives with a summary of the costs associated with the plans announced in the Speech from the Throne. This year however, like the year before, the speech will be in the Royal Theatre due to renovations at the Binnenhof.
Would you like to know what the impact of the decisions of Budget day will be on your taxes? Then contact us now!
New country, new tax system. Even if taxes aren’t the first thing you think about when moving country, they can become pretty important soon enough. Here is a brief overview of the Dutch tax system in the Netherlands, and how it works.
In what circumstances do I have to pay tax?
In the Netherlands, you have to pay taxes if you earn income while living in the Netherlands. So even if you are temporarily residing in the Netherlands as an expat, if you earn income from abroad, this will have to be declared in the Dutch tax return. Even if you don’t live in the Netherlands but if you work in the Netherlands, you will be taxed.
What kind of taxes are there?
Income tax
The first and most common tax is income tax. This means you declare your income in an annual tax return, which is called ‘aangifte inkomstenbelasting’. The deadline for this tax return is the first of May of the following year. If you are employed by a company, your income tax is automatically withheld from your salary by your employer. This withholding is known as wage tax and is included within payroll tax. However, if you are self-employed in the Netherlands, you are responsible for calculating and paying your income tax through the annual tax return process.
If you need to file a Dutch tax return, the Tax Office will send you a ‘aangiftebrief’, inviting you to file a tax return, for the previous year. If you don’t receive a letter, it is either because you don’t have to file a tax return, or because the Belastingdienst did not think it necessary to complete a form. However, sometimes interesting tax deductions can be applied and save you money, wherefore it is wise to (sometimes) file a tax return on your own initiative. Read more here.
Income tax
Payroll tax, withheld from an employee’s salary by the employer, includes wage tax and national insurance contributions for pensions, unemployment, and other benefits. This monthly deduction saves employees from paying income tax later.
VAT tax
This is known as BTW or omzetbelasting in the Netherlands. All businesses, except certain foundations and associations, must include BTW in their pricing. The three BTW rates are 0%, 9%, and the most common, 21%. The BTW is declared via the ‘BTW aangifte’, which is to be filed each quarter.
Corporate tax
This is called vennootschapsbelasting. This is for businesses that are in the Netherlands and also to those that receive income from the Netherlands and are established abroad. On kvk.nl is a useful income tax calculator, so you can see what the effects of the 2024 have on your income.
Corporate tax
If you live abroad and the testator lived in the Netherlands, this means you have to pay Dutch inheritance tax, by filing an inheritance tax return. The other way round though, no inheritance tax has to be paid in the Netherlands. Read more here.
Corporate tax
If you have to pay gift tax, this will have to be filed in a separate gift tax return. There are many situations however, when you don’t need to pay gift tax. For example, if you receive a gift from abroad, and if the gift is from a non-resident or a resident that has emigrated more than a year ago, no gift tax has to be paid. If the gift is received from a person with the Dutch nationality, different rules apply. Read more here.
Transfer tax
Interestingly, there is no capital gains tax in the Netherlands yet! Transfer tax is also known as overdrachtsbelasting, which has to be paid when you buy a house or a department. Finally there are taxes such as gambling tax, motor vehicle tax and import tax.
Tax help
When you are new in the Netherlands, or your income tax return is more complex if for example you have assets abroad, a house in the Netherlands or you need to file an M-form, it is wise to hire a Dutch tax advisor or tax accountant. We would be happy to help you with your taxes!
If you are thinking about working in the Netherlands, then there are a few things you may need to consider. You may have to request documents to work in the Netherlands, such as a visa or a work permit, depending on a few conditions. You can find the conditions here.
Of course, securing the necessary paperwork is essential, but taxes shouldn’t be forgotten either! If you are planning to work or live in The Netherlands, it is important to seek tax advice in the early stages of your migration. For example, you may be eligible for the 30%-tax ruling. Sometimes this can only be acquired by setting up a Dutch BV, which is the most practical when done before the move.
Working in the Netherlands
If you are working in The Netherlands, and living in a different country, then your taxes can easily become complicated. Usually, the country in which you work and earn your income is the country that is allowed to tax you. Sometimes however, the country in which you reside is allowed to levy income tax. This is only, if the 183-day rule applies in your situation. However, there are 3 conditions which must be met:
The recipient resides in the other country for a duration or durations totalling no more than 183 days within any twelve-month period, starting or ending in the fiscal year in question;
and the remuneration/compensation is not covered by a permanent establishment that the employer maintains in the other State.
And the remuneration/compensation is not covered by a permanent establishment that the employer maintains in the other country.
And the other way round: if you have been only living in The Netherlands and working (from abroad) or for a foreign company, then you should ensure your tax are filed correctly, in order to avoid double taxation!
If you are working in The Netherlands as well as living there it becomes a bit easier, but of course there are still plenty of things to look into, to ensure you are not paying more taxes than needed. It is worth getting your situation looked at, even if it is just to be sure there are no other ways you can save more tax. We can give tax advice on the tax impacts and benefits and of several scenarios, and of course help minimize Dutch tax on your income and assets. We can file your taxes without missing refund opportunities, and of course, negotiate with the Tax Office on your behalf.
Cross-border work can definitely be a challenge, tax-wise. But with Suurmond Taxconsultants at your side, you have your taxes under control!
Are you an expat and are you moving to The Netherlands? Then you might be eligible for the 30%-ruling. Click here to view the requirements. The 30%-ruling has undergone a lot of change this last year.
With the 30%-ruling you can opt for partial non domestic taxation in your tax return.This means you have the advantages of the Dutch tax system. You worldwide net wealth however, remains untaxed and consequently your bank accounts, other investments including property abroad do not need to be mentioned in the tax return. Moreover, you will receive 30% of your salary tax free.
Unfortunately now, the 30% ruling is slowly losing its attraction. Starting from January 1, 2024, the 30% ruling will be modified to a 30/20/10% ruling with a decrease after every 20 months over the maximum duration of 60 months. Moreover the option for partial non-resident taxation will cease as per 1-1-2027 for existing cases and as per 1-1-2025 for tax payers that have been granted the 30% ruling during 2024.
Why does the government want to decrease this favourable ruling?
Extra-territorial expenses generally decrease after the initial immigration was the thought behind this and an advantage that resident tax payers do not have.
So what did the 30%-ruling look like first?
The 30%-rulings that were granted in between 1 January 2012 and 1 January 2019 had a duration of 8 years. Then from 1 January 2019 to 1 January 2024, the applications had a duration of 5 years. Along with this was the exemption from tax on worldwide assets and related unearned income referred to as “partial non-resident tax status”.
What has changed since last year?
Since then, the decision has been made to cut the ruling back. For the expats who fall under the ‘old’ 30%-ruling: they can only opt for partial non domestic taxation until 1-1-2027.
And from 1 January 2024, for the expats that have newly acquired the 30%-ruling the compensation is a tax free salary component of 30% for the first 20 months. After these months, you will be able to receive 20% of your salary tax-free. Then, after this follows another 20 months where your allowance will decrease to 10%. In addition the partial non-resident tax status is only applicable for 2024.
Also, as of 1 January 2024 the maximum salary to gain the 30%-ruling has been set at €233,000 per year. A higher salary will remain fully taxable at the marginal tax rate of 49,5%.If you compare this to the former 30%-ruling, you can sure understand that moving to The Netherlands is less attractive as an expat. We are hoping members from parliament will also realize this and re-instate the full benefits of the ruling.
What are future prospects like for expats moving to Holland?
If you compare this to the former 30%-ruling, you can sure understand that moving to The Netherlands from a financial and tax point of view is less attractive as an expat. Obviously there are many other reasons why The Netherlands may still be the country where you wish to reside.
Parliament is slowly realising this wasn’t a good move for The Netherlands. As it is less attractive for expats to move to The Netherlands, they are now trying to think of alternative ways that make moving to Holland more attractive for highly skilled migrants. In addition there is concern for multinationals leaving The Netherlands as recruiting foreign expertise – that is so needed – becomes exceedingly difficult. We are hoping that government will re-instate the full benefits of the ruling.
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.
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.
As the new year looms on the horizon, businesses everywhere are gearing up for a fresh start in 2024. For expats who’ve made the Netherlands their new home and are venturing into entrepreneurship, finding the right tax accountant is a critical decision. Wondering why you should hire a Dutch accountant for the job? Here are four compelling reasons.
Tip 1: Navigate Dutch Tax Laws with Ease
Complying with Dutch tax laws and regulations can be a challenge. But fear not, Suurmond Tax Consultants has got your back! We ensure your filings are not only correct but also submitted on time. We also spare you the difficulty of having to communicate in a foreign language. Of course not only the language can constitute a problem, but also having to work your way through the complicated Dutch tax system often is a hard job for a foreigner. It is easy to misinterpret the system. We will guide you through the Dutch tax system with pleasure!
Tip 2: Optimize Your Tax Strategy by a Dutch accountant
Who doesn’t want to save money? Our tax accountants help optimising your tax strategy, potentially helping you benefit from incentives like the 30% ruling. Are you thinking of starting a business in the Netherlands? Then you may be able to request the 30% ruling. This means 30% of your salary is tax free. (link naar paginaaa) If you are eligible, then the company and payroll will need to be set up before you start working. Read here how we can help you with setting up and keeping accounts.
Tip 3: Comprehensive Support and Guidance
Starting and keeping a business running involves a multitude of financial tasks – from bookkeeping and auditing to payroll management and annual reporting. A Dutch accountant does not only offer expertise but also moral support in managing these essential aspects. Moreover, they can guide you in financial planning, investments, pensions, insurance, and inheritance, ensuring you’re on the right financial track.
Tip 4: Simplify Your Life and Save Time
Life as an entrepreneur can be hard work, and you need all the convenience you can get. Opting for a Dutch tax accountant who communicates in English streamlines your interactions with the Dutch tax authorities. No more language barriers! Plus, it just makes life easier when you have a knowledgeable Dutch accountant at your side to navigate you through the Dutch tax system.
Suurmond TaxConsultants is all for helping you start 2024 on the right financial footing. And what better way is there with a trusted Dutch tax accountant who speaks your language and the language of saving money and simplifying your financial journey! Contact us now, before the end of the year to see how we can help you.
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.
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