Income tax return
Outsource your income tax return
Each year around March it is time to file our taxes. The official term for this is filing your Dutch personal income tax return and social security contributions. It simply means that we should report our (worldwide) income, we should claim the possible personal deductions we are eligible for and we should report the value of our savings and investments in the case that these exceed the tax free threshold.
By filing your Dutch personal income tax return you can deduct certain expenses from your total income. These are called your personal tax deductions, because each taxpayer has his/her own tax filing requirement in the Netherlands. The deduction can include the mortgage interest of your main residence , educational costs, medical expenses which are not reimbursed by the health insurance and exceeding the deductible part and/or alimony obligations to your ex-partner. By deducting these expenses from your total amount of income you will lower your taxable base and by doing so the amount of taxes you need to pay decreases.
In your payroll, with the monthly calculation of the wage withholding taxes / income taxes, your employer unfortunately cannot take your personal expenses into account. As a result, the taxes considered in your payroll and paid by your employer to the Dutch tax authorities on your behalf (also the difference between your gross and net income) are always more than in the situation when you have personal deductions. Therefore, when you have personal deductions, the outcome of your tax return will result in a tax refund. This refund will be the difference between the income tax that is calculated and paid by your employer and the income tax that you calculated at the moment of filing your Dutch personal income tax return.
These days the Dutch tax authorities prefills your tax return data when you start with the preparation of your tax return (VIA). Since the data is already filled in by the Dutch tax authorities, the question that arises frequently is:
Should I still outsource my income tax return or should I do it myself?
Outsourcing is the easiest and most chosen option. And although we are happy to service you, you could try to do it yourself as well if not much has changed in your personal situation.
- You are employed
- You are not working internationally
- You have no foreign income
- You do not own a business
- You are not a ‘Director and Majority Shareholder’ (DMS)
- You do not apply for the Dutch 30% ruling
- You did not buy a house
- You are not renting out (part of) your house
- You did not migrate
- You did not get a divorce
- You do not have children
- You have no foreign capital
- You have no educational expenses
- You have no medical expenses
- You have no side or second income
- You do not apply for special tax benefits
If your answer to al off the above is ‘no’ than you can try to complete the pre-filled income tax return as it is available on the website of the Dutch tax authorities. All you need to do is gather the information needed, check the pre-filled income tax return and correct it if needed. But like you can read in the previous list there are a lot of situations that can change the end result of your income tax return. Practice experience shows that people still make mistakes and miss a lot of tax benefits.
If you have a tax partner you should research how the tax deductions and savings and investments should be divided in a most beneficial way. Even though every taxpayer has his/her own tax filing obligation, as tax partners you can ‘allocate’ personal deductions and the value of your savings and investments between each other to take a more beneficial position each.
If you have a child or multiple children you might be eligible for the income dependent combined tax credit. If you have a non-working partner, you might be eligible for the pay out of the general tax credit.
Because of all these possible variations, most people rather outsource their personal income tax return to a specialized tax advisor or bookkeeper. But keep in mind that there are large differences there as well. Some tax advisors simply fill out the income tax return using the information you supply them without taking your past and future situation into account. Some even use your Digi-D details and simply complete the prefilled tax return as it is made available by the Dutch tax authorities.
When we prepare your income tax return we will never ask for your personal DIGI-D credentials. What we will do is check whether you missed benefits (money) in the years before and whether you are eligible for benefits in the near future.
Advantages of outsourcing the income tax return
Outsourcing your income tax return comes with other benefits as well.
A few examples:
- Complete usage of possible tax deductions.
- No fear for future tax claims.
- You supply the information, we take care of the income tax return and filing.
- Are you eligible to benefits that are not used? We will find them.
- If you are self-employed than outsourcing the income tax return is always the smartest choice.
Income tax returns for Expats and migrants
We at Profinancials are highly specialized in international tax regulations. We are very proud to be the trusted tax advisor for over 750 expats each year.
Are you searching for an attractive priced office specialized in Dutch personal income tax return for expats and/or for expat tax services? Than you searched and found Profinancials.
Our office is located in Eindhoven, but we service the entire Netherlands. And being specialized in expats we are servicing expats all over the world by now. We would love to help you as well!
Contact us today!
Are you in need of advice on international taxes, exemptions, tax returns or have questions relating international employment?
Feel free to contact us today! We are happy to give you the advice you were looking for.