I filed the wrong tax return?
The tax authorities state that I have filed the wrong tax form. They state my living situation is different from the information in the tax return. What to do?
Me and my husband lived and worked in the Netherlands from 1995 onwards. From 2007 onwards my husband started working in the UK. Me and our children did not move straightaway with him to the UK, since there were too many issues that could not be finalised on time (length of the job contract, schooling of our kids, sale of our house, mortgage in Holland, etc). Thus we moved in 2008 to the UK (I have proof of having paid tax here in the UK) . Due to all this confusion, we deregistered from the gemeente only in 2009.
About 2 months earlier, we got an income tax notice asking us to file tax returns for the years 2008/2009. My husband phoned up the tax authorities and informed them that we are living in the UK and paying tax here, and thus they asked us to file a non-resident tax return, which we did. Now I have got another notice from the tax authorities to say we should be filing a resident tax return (and they have given me 15 days time to do this !). I am quite confused as what is to be done. Is it OK to file a resident tax return as the belastingdienst is asking us, showing no income in Holland? My husband says it is pointless talking to the belastingdienst as they misguided us in the first place. It is very confusing what we have to do. Would be very grateful for your advice please, so that the issue can be resolved straightaway with the belastingdienst.
The tax authorities are connected to the registration system of the municipalities, so that is where they automatically get your address from. You deregistered in 2009 and that is all the tax authorities know, therefore assuming that you have left in 2009 and assume that you have lived in the Netherlands in 2008 the whole year.
For 2008 they treat you as full resident or in Dutch ‘binnenlands belastingplichtig’. The system automatically wants a tax return for residents, any other tax return will not be processed.
This is how it is done in practice. In theory the law states that where a person lives is determined based on the actual facts and circumstances. You actually left the Netherlands in 2008. This is what you told the tax authorities on the phone. Based on that they told you that you are non-resident. The answer you received on the phone was right. However bureaucracy wins it from common sense here. What they told you on the phone is overruled by the computer system. This is what happens if computers are in charge. Whatever the computer says is right.
So you now have two options.
1. Object against the letter you received, argue that you were living in the UK and provide proof of this (registration in the UK, UK tax form, your name mentioned on UK bills and receipts etc.), request a new tax return and file that one. This procedure can take some time. My experience is that sometimes these objections disappear and nothing seems to be done with it, which of course could be frustrating. As such the saying ‘honesty lasts longer’ is certainly right. The letter you received should mention that it is possible to object against the letter and to proof that the tax return you filed is right.
2. You can also just do what the tax authorities request. File the tax return they want, although it is the wrong one. The tax return can be filed as such that it will not make a negative difference for the end result for you. But this depends on your actual situation. It can lead to discussions later if you have savings and investments in the Netherlands in that year and the tax authorities can wonder how you have supported yourself if no income is declard. The difference with option 1 is that if there will be a discussion that it will take place after the tax return has been accepted by the tax authorities instead of upfront. It is not certain that there will be a discussion though.
You will have to choose between the two options. Option 1 is the right one, but can take a long time; option 2 is officially the wrong one, but is requested by the tax authorities (and therefore they can’t hold it against you) and can be arranged quickly. But you need to get the procedure going, right now it is standing still. If nothing is done the tax authorities will just estimate something.
Since you own a property in the Netherlands you will have to file a tax return. This will have to be done for 2008, but also for 2009, 2010 and 2011. At least I expect that the tax authorities want you to file a tax return for these years.