How to file your income tax for newcomers

Filing your income tax return is a complex process. Especially when you are new to a country and unfamiliar with its tax procedures and requirements. This is where Blue Umbrella can help!

Arriving fresh to the Netherlands, the process of filing your taxes may be even more puzzling. The first hurdle you need to take as a newcomer is figuring out how to file your tax return. You may find out that the Dutch tax office tries to make life easier by letting you file your taxes online using the DigiD system. However, is this really the case? 

The 59-page paper booklet

As a newcomer to this country, you cannot use the online DigiD tax filing system. You end up filling out the wrong form as the system is designed for permanent resident taxpayers. Unfortunately, you will not receive a warning or notification to quit the online form. The best-case scenario is that the Dutch tax office will mail you a rejection of the tax filing application, accompanied by a request to fill out a 59-page paper booklet. The so-called M-form. All forms and guidance are in Dutch! So, now, you’re back at square one…

Tax filing for a broken tax year

The main reason why you cannot use the DigiD system for online tax filing is that you, as a newcomer, most likely will have a broken tax year. A full tax year runs from January 1 to December 31 of a year. A broken tax year starts on the date you arrived in the Netherlands.

Arrival or registration date?

Now another complication starts. What is the exact immigration date to report to the Dutch tax office? It is important to get this date right, as your income tax return results depend on it.

The legally correct date is the date when you actually arrived in the Netherlands. Of course, you may say! True, but this is not how the Dutch tax office approaches this.

The tax office uses the date of registration with your municipality (gemeente) or the Ministry of Foreign Affairs. This date may deviate significantly from your actual arrival date. If you arrived in the Netherlands by the end of, say, 2017, you may end up filing both 2017 and 2018 with the incorrect tax form, according to the Dutch tax office.

Your actual arrival date is initially not considered by the Dutch tax office. If you use this date, expect the Dutch tax office to reject your tax filing, as it deviates from the registration date with your municipality or the Ministry of Foreign Affairs. Later, this can be corrected with an appeal procedure, which requires you to establish direct contact with the Dutch tax office. If you use the registration date with your municipality, you avoid the aforementioned discrepancies from happening in the first place.

Sole trader or sole proprietary business owner

On top of the 59-page paper booklet, sole traders or sole proprietary business owners are also required to complete an additional 24-page booklet in Dutch. The correct immigration date matters for your business income tax return filing.

Irrespective of your date of arrival (or departure), with Blue Umbrella you can file your income tax return completely online using a plain English tax questionnaire. All you need to do is sign up online and start the online questionnaire! Small business owners are recommended to send an email to Blue Umbrella instead.

If you have any questions, please do not hesitate to contact Blue Umbrella at [email protected].