How should you prepare for the 2021 Dutch tax filing?

A broken tax year

Having a broken tax year means that you immigrated or migrated to or from the Netherlands in this tax year. The consequence of this is that you possibly need to file an M-form. So, to be prepared, make sure to get all the proper information ready before the tax season starts.

For example, gather information like flight tickets, rental contract(s) or gym subscriptions that can show the exact period when you started living in the Netherlands, or left the Netherlands. Note that one of the most important documents that will serve as evidence is the registration or de-registration certificate form from your municipality.

Your employment income

When working for an employer in the Netherlands, you will receive a payslip each month. What happens often is that clients provide their tax adviser only with one payslip, since they have easy access to these. What you should have to gather from your payroll-portal or HR department is the annual payslip / annual income statement. This is basically a summary of the previous year.

Why is this important? Most of the time, payslips from just one month do not provide the complete overview of the year, not even the December payslip. For example, bonus payments or corrections afterwards can be mentioned only in the annual income statement. Employers will often provide the annual overview to their employees in February or March. Please note that when you have not received the statement, you can request this statement from your employer / HR department.

Your residential home

If you have bought a home in the Netherlands it can be a possibility to get a tax credit, based on the costs related to the mortgage of your residential home. This can include interest payments, intermediary costs for the mortgage broker or notary costs related to the mortgage. If you just bought a home, you should get an overview from the notary that shows all costs related to the purchase, and that document will include all costs which can be considered as a credit.

For the interest payments for the mortgage, you will receive an annual overview from your bank / mortgage provider, or you can download this yourself from your online portal with the bank or company that provided the mortgage. These documents are always needed to declare the costs in your income tax filing.

Filing with or without your fiscal partner?

One of the other questions that often gets asked is whether filing together is better than filing alone. This is often hard to determine, as a tax adviser does not always have all the information upfront. But there are a couple of examples where it can be wiser to file together to lower your tax bill. For instance, if a couple has a highly fluctuating income or one earns around 70.000 euros and the other around 54.000 and they own a residential house with a mortgage in the Netherlands.

Also known to a lot of people is the non-working spouse tax credit, which you will only get if you file with your fiscal partner (when meeting all the criteria, of course). Another example where you may benefit from filing together is when one of the partners has the 30% ruling, as this can also benefit the fiscal partner.

What happens often though, is that the partner files separately. Due to miscommunication between partners and having little understanding regarding the formalities of the Dutch tax system, some tax credits will be applied twice. This will then result in tax consequences later in the year, like repayments of any received refunds with interest on top.

Is it wise to file together? Often it is and it is strongly recommended to do so, to prevent mistakes and optimise your tax position(s). To check your case or to determine if your partner can be determined as a fiscal partner, we recommend discussing this with your tax adviser.