Tax partners in the Netherlands: Filing a joint personal income tax return

Dutch residents, in general, are obliged to file their annual personal tax return if they have anything to declare that leads to a tax amount, or when the Dutch tax office sends a filing request. It is, however, also possible to file your taxes if you expect any refund in your personal income tax return.

When are you considered tax partners for personal income taxes?

You are considered a tax partner if you fulfil one of the following conditions:

• You are married
• You have a registered partnership at the municipality

You are also considered tax partners if you are living and registered with your partner at the same address and:

• Have a notarial cohabitation agreement
• Live together in a jointly purchased property
• Have a child together or you acknowledge the child of your partner
• Have a minor child of one of the partners registered at the same address
• If you are mentioned in your partner's (employer) pension scheme
• If you were for any reason considered as tax partners in the previous year

Tax effects of the tax partnership 

The Dutch tax system for individuals is split into boxes. There are three categories of taxable income; each referred to as a "Box" and each with its own rate:

• Box 1 - Taxable income from freelance income, employment, pension, alimony and main residency
• Box 2 - Taxable income from a substantial interest
• Box 3 - Taxable income from savings and investments

As a tax partner, you can divide some elements in your tax returns. This applies to some income, as well as for some of the deductions you can claim. The benefit of allocation is that you can allocate the deductions to the tax partner with (the highest) income. That can lead to lower taxes or a refund for the person to whom it is allocated.

It is also possible to allocate some taxable income to the partner. As tax partners, you can make optimal use of the general tax credits by allocating income. The tax credits can even be paid out by the tax office if one of the two tax partners does not work at all and no allocation of income has been made.

What can and cannot be allocated

In each box, there are certain things you are allowed to allocate to your tax partner.

Box 1

Income

Your personal income from employment or self-employment, pension or alimony cannot be allocated to your tax partner. That is always taxed with the person who receives that income.

The fixed sum (income) of the homeownership of your main residency can be allocated to the tax partner.

Deductions

The following deductions can be allocated to each other in Box 1:

• The paid mortgage interest
• Paid tuition fees (not deductible anymore starting tax year 2022)
• Donations to certain registered charity funds
• Certain medical expenses which are not covered by healthcare insurance
• Paid partner alimony

The following deductions cannot be allocated to your tax partner:

• Paid premiums for additional private pension (annuity)
• Premiums paid for your disability insurances (applicable for entrepreneurs)
• Travel expenses to work (if more than 10 kilometres) made with public transport and not fully covered by the employer

Box 2

In Box 2 you can allocate dividend payments received as a substantial shareholder (5 percent or more).

Box 3

As tax partners, you have also the possibility to allocate Box 3 assets to each other.

That leads to a higher threshold for the joint value of your assets. You can also put most of the assets in the lower tax brackets by dividing the value of the combined value of the assets.

Below are the effective Box 3 tax rates for 2022 that are paid by private individuals in the personal income tax.

The tax rates are after the threshold of 50.650 euros (double threshold for partners) as follows:

30 percent ruling 

Note that if one of the tax partners falls under the 30% ruling application, that partner can opt to be treated as a partial non-resident taxpayer. As a partial non-resident taxpayer, your tax partner can benefit from the tax exemption for Box 2 and Box 3.

Box 2

As a partial non-resident taxpayer you, as well as your tax partner, do not have to pay tax on dividend income received as a substantial shareholder in Box 2 (5 percent or more) if the payments are received from a foreign entity. This applies during the whole period that you are under the 30% tax ruling application. The dividend income is during that period exempt from Dutch taxes.

Box 3

That also applies to taxes on savings and investments in Box 3. These are exempt from Dutch taxes during the period that one of the tax partners is a holder of the 30% ruling application.

The only exception is real estate, when the property is located in the Netherlands but not considered your primary residence. This real estate will have to be declared in any case in Box 3 of your personal income tax return.