As the Dutch tax season for the previous year, 2023, approaches, taxpayers across the country are gearing up to fulfil their fiscal responsibilities. With various updates and changes to the tax laws and regulations, it is essential for individuals to stay informed to ensure accurate filing and compliance with the latest requirements.
The Dutch tax authorities (belastingdienst) will officially open its portal for tax returns on March 1, marking the beginning of the tax season. For most taxpayers, the deadline to submit their tax returns is May 1. However, individuals who wish to voluntarily file their returns have until July 14 to do so.
One important aspect to note is that taxpayers have the option to extend their filing deadline by three months at no additional cost. This extension can provide valuable time for those who require extra time to gather necessary documents or seek professional assistance with their tax filings.
For the tax year 2023, adjustments to tax rates and deductions have been implemented. The basic tax rate, applicable to annual incomes up to €73.031, has been slightly reduced from 37,07% to 36,93% (Box 1). Similarly, the tax rate for deductions has been lowered to align with the basic tax rate, providing consistency across different income levels.
Conversely, the top tax rate remains unchanged at 49,5%.
Another notable change for the 2023 tax year pertains to property taxes, specifically the eigenwoningforfait. This tax, which is levied on the deemed rental value of owner-occupied properties, sees a slight reduction in its percentage rate.
Properties valued between €75.000 - €1.200.000 will now be subject to an eigenwoningforfait rate of 0,35%, down from the previous rate. Properties exceeding €1.200.000 will maintain a higher rate of 2,35%. These adjustments aim to reflect changes in property values and ensure fairness in the taxation of residential properties.
Expats immigrating to the Netherlands in 2023 may encounter unique tax considerations. While they may not receive a tax letter from the belastingdienst, it is advisable for them to file their tax returns.
They may be eligible for refunds or credits based on their individual circumstances, and failure to file a tax return could result in missed opportunities to claim these benefits.
Another common mistake is that if people live in the Netherlands but have a company established elsewhere, they think they only need to report it in the country of establishment. However, if you pay taxes in the Netherlands, you are obligated to declare your worldwide income. The tax authority then determines which country you owe taxes to or from which country you may receive a refund based on double tax treaties (if applicable).
The only exception to reporting worldwide assets - only for 2023 - applies to individuals with a 30% ruling who can choose to be partially taxable elsewhere: this means that assets can be taxed at their actual location. Real estate is generally taxed where it is located but must still be reported.
Additionally, as of 2024, those recruited to the Netherlands under the 30% ruling will receive 30% of their income tax-free for the first 20 months. For another 20 months after the first period, employees can receive 20% of their income tax-free, followed by 10% in the subsequent 20 months. The maximum salary for this scheme is now capped at €233.000, mirroring the salaries of top civil servants.
As the tax season unfolds, taxpayers are encouraged to file their tax returns early to avoid potential delays or penalties. Ignoring warning notices from the Dutch tax office can result in fines and outstanding tax amounts after the deadline passes, which may accrue interest at a significant rate of 6%.
Furthermore, timely filing allows taxpayers to promptly address any discrepancies or issues that may arise during the processing of their returns. By staying proactive and organised, taxpayers can navigate the tax season with confidence and peace of mind.
In conclusion, the tax season for 2023 brings several updates and changes that Dutch taxpayers need to be aware of. From filing deadlines and rate adjustments to property tax modifications and special considerations for expats, staying informed is key to ensuring compliance and maximising benefits. By taking proactive steps and seeking professional advice if needed, taxpayers can navigate the complexities of the tax system with ease and efficiency.