Expat tax tips - Expatica (2005)

Expat tax tips: part 1

Published on in 2005


This is the first in a short series of tips that hopefully will help you file your completed tax form on time.


This is meant as a general guide only and you should seek professional help if you feel your tax situation is too difficult to deal with yourself.


On this page:

  • Do I really have to file?

  • The disk

  • Help, the deadline approaches

  • What am I paying for?

  • Travel expenses

Do I really have to file?


The Belastingdienst (Dutch tax office) has answered this question for most people: it sent out over 8 million tax forms at the beginning of 2005. Many people will have received the tax forms on a computer disk. It handily combines all the necessary forms and help information; handy, that is, if you can read a bit of Dutch.


If you don't feel comfortable dealing with your tax affairs in Dutch, it is advisable to seek professional help. 


"Not everyone has to file, especially individuals without children who are in the Netherlands for the whole year and have a normally paid job with no other income," says Arjan Enneman of Expatax.


The test should be: has your personal situation in terms of your home, your family or salary and benefits changed during 2004? If there have been changes you may need to file. If not, you may not have to.


But what if you arrived in the Netherlands or started work midway through 2004 and the tax office has not sent you any forms?


Newcomers should definitely file for (part of) the first year in the Netherlands , says Taxpat's Eric Jansen, as you are probably entitled to some tax back. People in this situation should use an M form, which cannot currently be filled in and sent electronically. You should write to your local tax office in English or Dutch to request one. Ring the tax information helpline 0800  0543 (from within the Netherlands ) if in doubt about which office to contact. (Comment Expatax: if you use the help of a tax advisor then you don't have to request a form).


Jansen says people who left employment in the Netherlands midway through the year should also file as they are probably entitled to some money back.


People who benefit from the 30 percent tax ruling for expats must file a return. (Comment Expatax: this is not always required, it depends on the individual situation).


The disk


If you have been in salaried employment in the Netherlands throughout 2004 you can file your returns in a number of ways:


  • in paper form through the post (Comment Expatax: nowadays a paper form is only applicable in the year of migration)

  • on the supplied tax disk through the post (Comment Expatax: the disk is not used anymore)

  • send the downloaded form over the internet


Help, the deadline approaches


Have you got your paperwork together and are now in a panic? Don't be.


Filing on or before 1 April increases your chances, but by no means guarantees, the tax office will examine the return by the following June. But should you need it, you can request an extension of the deadline relatively easily. All you have to do is write to your tax office and you will be given to 1 July 2005 to file. You do not have to state a reason.


Registered tax advisers may have a deal with the tax office that allows an extension to March the following year. (Comment Expatax: Expatax has such a deal with the tax office)


Remember your filing consists solely of the tax form(s). You retain the background documentation and receipts, and only provide these to the tax office if asked. This might tempt some people to inflate estimates of costs and losses to increase the chance of a hefty rebate. This approach is best avoided as it would be illegal and could lead to a closer inspection of your tax affairs. It is a much better idea to focus on getting back everything you are entitled to.


If you are rushing to get your form to the tax office before the deadline, remember that the digital version can be transferred and acknowledged in seconds. The paper form can take a day or more if sent in the post.


What am I paying for?


"Many expats end up paying too much tax because they don't really understand the tax system or even their pay slip," says Robert Bosma of Finsens Planning.


The first two brackets of income taxes (33.55 percent and 40.50 percent) mainly consist of social security premiums (32.55 percent or EUR 9,600 out of the EUR 10,800 total for bracket one and two).


Check whether you are liable for premiums in the Netherlands , says Bosma. Ask yourself, are you insured for the full year, or  is there an assignment contract under which premiums are still paid in your 'home' country?


If you benefit from the 30 percent ruling, you can opt to be treated as a 'partial non-resident'. This is beneficial if you have net assets (box three) other than Dutch real estate. It is important to note, says Bosma, that when opting for 'partial non-residency' you might miss some personal deductions.


  • US nationals and 30 percent ruling: if you travel for work, your non-Dutch working days may be non-taxable in the Netherlands .

  • Partner without income: you may be entitled to an extra deduction off your income taxes.

  • Study expenses: deductible (exclusive of travel cost)


Travel expenses


Enneman notes you can deduct a fixed amount if:

  • the distance between home and work is at least 10 km with public transport

  • you travelled to your work at least once a week and back again within 24 hours or at least 40 days per year

The catch is that you must be able to prove it by providing an 'openbaarvervoerverklaring' statement from the public transport company in Dutch. If you can't get this statement because you travelled using single tickets every day then your employer can make a statement confirming that you used public transport but in that case you must also keep all of the single tickets. You can't claim a deduction if the employer bought the tickets. 


US expats who benefit from the 30 percent ruling and who travel outside the Netherlands for work can get a substantial deduction from taxable income. Jansen says that the tax office has (under certain conditions) accepted that 30 percent holders who are married to a US citizen should also be in line for the deduction.