In this issue
• Time extension tax return 2007
• US tax returns
• Financial planning
• Education costs
• Focus on savings and investments
The tax season has almost reached the deadline of 1 April. Tax returns are filed by us on a daily basis. The tax office is also working overtime, trying to cope with the existing chaos. As you may have read in the newspapers the tax office recently lost over 730,000 tax returns which were filed for 2007. The State Secretary had to admit the tax office didn't make back ups of the filed tax returns for the last 10 years! We have the confirmation that none of the tax returns we filed was lost. But this was another error on the long list. We do have the impression though that it is all slowly getting better. We have recently written an article about this in the Xpat Journal. We have also published a new advertisement in Xpatriate Magazine (download can be slow). Don't forget to arrange a time extension if your tax return can't be filed before 1 April.
Many income tax returns must be filed before 1 April. We have already received information from a lot of clients and completed many tax returns. For tax returns which can't be filed before 1 April we will arrange a time extension till 1 April 2009.
If you haven't sent us your documents yet and you would like us to file your income tax return then we can arrange a time extension for you. If we have completed your tax return for 2006 we will normally automatically arrange a time extension for you for 2007. If you would like to be sure a time extension is arranged for you please send an email to including your full personal details (and sofinumber) and we will make sure that your tax return is on our time extension list. Please contact us before Friday 28 March 12.00. Also new clients are more then welcome to contact us of course.
The first filing deadline for 2007 US returns is 15 April. There is an automatic extension of this filing deadline from 15 April to 15 June for individuals who are not in the US on 15 April. However, if there is any tax liability due, then this liability will have to be settled by 15 April to avoid incurring interest or penalties.
Within our network we can offer you financial planning again. This includes:
- offshore investment
- life insurance
If you had education costs in 2007 then these costs may be tax deductible. Some of the expenses can be deducted, other expenses are exempted. There is also a threshold applicable of 500 Euro per year. Relevant is when the costs were made.
Every year the tax office chooses a specific topic in the tax return which is checked in more detail. This year the tax office will take a closer look at the (world wide) savings and investments. Nowadays it is a hot topic because of the stolen information from banks in Luxembourg and Liechtenstein. The Court of Justice ruled that this information can be used by the tax office. The fact that the information was stolen by a third party is not relevant in this situation, relevant is that the tax office did not gather the information themselves with illegal methods. There is only still discussion whether the tax office can go back 12 years to correct previous tax returns because it concerns an international situation instead of 5 years which is applicable in a national situation. The question is whether this is against the freedom of movement within the EU.
If you have the 30% ruling and opt for partial non residence in the tax return then you don't have to declare your savings and investments. In that case the tax office will not correct anything. If you have your investments offshore you won't have to report them under the 30% ruling. In the other country you can opt between a dividend tax at source or providing information to the Dutch tax office by the provider. As long as you have the 30% ruling, providing information seems the right option. But as soon as the ruling ends you will have to declare the offshore investments. Then it will not be possible anymore to change to the option for a dividend tax at source. Relevant is how long you plan to stay in the Netherlands and the expected dividend to determine which option should be chosen.
In the next issue we will discuss changes in the payroll for 2008 and also recent interesting court cases and changes in rules and policies.