All you need to know about the income tax declaration 2023 (Inkomstenbelasting) in the Netherlands.

1. What is the income tax declaration?

It is the tax paid on income earned during a fiscal year, which starts on January 1st and ends on December 31st; whether it is income from employment, business, various sources, etc.

2. Am I obligated to file the income tax declaration in the Netherlands?

If you received an invitation letter from the Tax Agency (Belastingdienst), you are required to file the income tax declaration on the date mentioned in the invitation letter, or else you will receive a fine for not doing it on time. In general, the letter may specify that you should submit the declaration between March and April of the year you received the letter.

Please check the complete article on when you are obligated to file the income tax declaration: https://www.tax-in.com/en/file-income-tax-return/

3. What happens if I did not receive the invitation letter, then am I not obligated to file the income tax declaration?

If you did not receive the invitation letter but owe more than 52 euros in taxes (reference for the year 2023) in the income tax declaration, you are obligated to submit the declaration. However, you have up to 5 years to submit it.

4. What type of declaration form applies to me?

There are different types of forms: M, P, C, and F. To know which one applies to you:

• Form M: the year you migrate or emigrate from the country as a resident.
• Form C: if you are a non-resident throughout the year in the country.
• Form P: if you are a resident throughout the year in the country.

Please check the complete article on the types of forms in the Netherlands: https://www.tax-in.com/en/taxformularies/

5. When should I file the income tax declaration?

The income tax declaration should be submitted between March and April of the following year. If you have received a letter with a deadline, you must comply with that date mentioned in the letter, or else you will be fined for submitting the declaration late.

6. How long until I receive a response?

If you submit your income tax declaration within the specified time, between March and April, on average, you can expect a response before July of that year. However, if you submit your income tax declaration outside of these dates, the resolution of your declaration may take from 6 to 36 months.

7. What documents should be presented for the 2023 income tax declaration? (Between March and April 2024)

There are several documents that both individuals and self-employed individuals (known as “eenmanszaak” in Dutch) should take into account.

Please check the complete article for more details: https://www.tax-in.com/en/documentsdutchtax/

8. What are the deductible expenses for individuals in the income tax declaration?

Health:

• Disability
• Costs not covered by health insurance (own risk – eigen risico)

Own House:

• Mortgage interest and debt
• Expenses for property purchase

Education:

• The deduction of education expenses was eliminated for 2022.

Please check the complete article on subsidies or aid available in the Netherlands: https://www.tax-in.com/en/allowancesnetherlands/

Donations:

• Ordinary >60€
• Periodic has no limits.

Transport:

• Transportation expenses in case your employer does not pay for it.
• You must live more than 10KM away from your company.

9. What tax credits (heffingskorting) exist and how are they applied in the income tax declaration?

There are several tax credits such as:

a) General tax credit (Algemene heffingskorting) b) Employee discount for employees (Arbeidskorting) c) Income-dependent combination discount (Inkomensafhankelijke combinatiekorting) d) Tax credits for AOW beneficiaries (Heffingskortingen voor AOW-gerechtigden) e) Disabled young person discount (Jonggehandicaptenkorting) f) Lifetime leave discount (Levensloopverlofkorting) until 2022 g) Green investment tax credit (Heffingskorting voor groene beleggingen)

Please check the complete article on tax credits in the Netherlands: Tax credits (heffingskorting) in The Netherlands and how applied in the income tax return

10. What is the 30% ruling benefit in the Netherlands, and who can apply for it?

If you come to work in the Netherlands from another country, your employer can choose to pay you 30% of your salary, including extraterritorial expenses, tax-free. This benefit is called the 30% ruling. You also have tax benefits in the income tax declaration.

Please check the complete article on tax credits in the Netherlands: Payroll tax Credit (Loonheffingskorting) and how does it apply if I have more than one job in the Netherlands

11. What is the Payroll Tax Credit (Loonheffingskorting), and how does it apply if I have more than one job in the Netherlands?

A tax credit is a discount on your income tax and national insurance contributions. If you work as an employee, your employer takes into account the general tax credit (algemene heffingskorting) and the employee tax credit (arbeidskorting) in your payroll. These discounts are called payroll tax credits (Loonheffingskorting). In other words, you pay less payroll taxes and receive more salary. If you work as an employee, you are entitled to a discount on your taxes, but it should only apply to one job during the year.

Please check the complete article on tax credits in the Netherlands: Payroll tax Credit (Loonheffingskorting) and how does it apply if I have more than one job in the Netherlands

12. What is the unsolicited 2024 tax assessment (Voorlopige Aanslag 2023), why do I receive it, and what should I do?

The tax authorities (Belastingdienst) estimate in advance, based on your income from two years ago, i.e., the year 2024, how much income tax you will have to pay in the year 2024. That’s why they send you a provisional assessment for 2024 in January 2024. This is a mandatory invitation. The advantage you have is that when the provisional assessment for 2024 is sent, you would pay less taxes in the income tax declaration 2024 (which is done between March and April 2024), as you already paid the taxes in advance (only in case you owe taxes).

Please check the complete article for more details: Provisional tax assessment 2024 (Voorlopige Aanslag)

Source : Belastingdienst