The Dutch tax system has been going through quite a big reform lately. To compensate income loss for specific groups of people, the Tax Administration has introduced several benefits. These benefits can be applied for on the website of the Tax Administration concerning benefits (Toeslagen).
Rent Benefit – Huurtoeslag
Are you planning to rent a home in the Netherlands? And do you spend a large portion of your income on rent? Then you may be eligible for a subsidy for the rental costs: the rent benefit. Whether you are eligible for the rent benefit depends on, among other things, your age, income and living situation.
Childcare Benefit – Kinderopvangtoeslag
Will your children be going to day care while you live in the Netherlands? Then you might be eligible for a childcare benefit. In order to receive this benefit, you and your benefit partner must be employed or studying. You can also receive the benefit if you are not employed, but are following a re-integration programme via UWV (Uitvoeringsinstituut Werknemersverzekeringen / Employee Insurance Implementing Body) or the municipality. Furthermore, your child must go to a registered childcare organisation.
Health Care Benefit – Zorgtoeslag
Do you have a Dutch health care insurance? Then you may be eligible for a health care benefit. Among others, you must be over 18 and your income may not be too high. If you do not reside in the Netherlands but work abroad, and you do not have a Dutch health care insurance, you are not eligible for a health care benefit. On the website of EURAXESS you can find a guide in English on how to apply.
Child Benefit – Kindgebonden budget
Will you be residing in the Netherlands and do you have children under the age of 18? Is your income less than €20.109 per year? Then you are most likely eligible for a child benefit. You are required to receive or start receiving a family allowance. Alternatively, if your child is 16 or 17 years of age, you have to provide the majority of the child’s care.
You will receive the child benefit from the Dutch Tax Administration. Applying for a child benefit is usually not necessary. You will automatically receive information if you qualify for a child benefit. However, the Tax Administration does not have sufficient data regarding some groups of society and is therefore not always able to determine automatically who qualifies for a child benefit. If you have not yet received information regarding a child benefit, but you think that you are eligible, you can contact the Tax Administration.
You can apply for the benefits yourself at the Tax Administration website or for more information, please click here.
Employees already pay taxes through the amount of money withheld from their monthly wages. However, this is just an advance payment on what you are expected to pay.
Besides your wages, you might also have other sources of taxable income, such as income out of freelance activities or business activities. On the other hand, you might also be entitled to some tax credits or deductions because of your personal circumstances.
In the beginning of every year, a tax form for the previous year becomes available at the Tax Administration website. Besides the annual tax return forms, there are also provisional tax return forms for the current year. If you use these forms, you do not have to wait for a final settlement by your declaration at the end of the year. It is also possible to receive or pay money on a monthly basis.
All employees are entitled to the so-called general tax credit (Algemene heffingskorting). This is a credit on your taxation through your employer. It is possible to receive tax credit for your non-working partner as well under this general tax credit. The general tax credit is applied through the provisional tax return form, which is available on the Tax Administration website.
For the annual tax return form, the deadline is April 1st.
People who have migrated to the Netherlands during the previous year will receive a so-called M form. This form is not available online and will be sent to your home address. You can also order this form by calling with the tax service, phone number +31 (0) 555 385 385. Keep your BSN number ready.
Non-resident taxpayers (persons with their main place of residency outside the Netherlands) are required to complete the so-called C form. This form is also available on the Tax Administration website.
Although the tax administration tries to makes things as easy as possible for you, a basic understanding of the system is still necessary. Because you have been recruited from abroad and your personal circumstances may differ a bit from ordinary Dutch people’s circumstances, we advise you to get assistance from a tax advisor with knowledge of international tax issues, like one of the partners of the Expat Center East Netherlands.
For more information, please contact our service partners on taxation.
30% tax facility
If you make use of the 30% tax facility, you can opt to be treated as a partial non-resident tax payer even if you are a resident taxpayer. This means that you will not be taxed on income out of investment and savings from outside the Netherlands.
If you come to work in the Netherlands, you are possibly confronted with extra costs, so-called extraterritorial costs. Your employer may grant you a free (untaxed) reimbursement for the extraterritorial costs that you incur. Your employer may also provide you with 30% of your wage, including reimbursement, tax-free. This facility is known as the 30%-facility. For this, it is not necessary to prove that expenses have been incurred.
The 30% facility applies to you if you were recruited outside of the Netherlands or seconded from a country other than the Netherlands to work in the Netherlands. Conditions including the following will apply to making use of the 30% facility:
– You have an employment relationship.
– You have specific expertise that is not or is only barely available on the Dutch employment market.
– You have a valid decision.
– In the 24 months prior to your 1st day of work in the Netherlands you live more than 150 kilometres in a straight line from the Dutch border.
See also the exceptions to the 24-month term and for people with a PhD.