PTA GUIDE

In the Netherlands, spouses are taxed separately on labour income (like a salary). If both spouses are considered resident taxpayers, other income like your Dutch or foreign main residence, but also deductions like medical expenses and alimony, can be allocated to one of the two or to both spouses in any spread. If the partner is not working he/she is entitled to the refund of the non-working partner. For this refund the working partner needs to pay at least € 2,000 a year on taxes and the joined household has to exist for more than 6 months in a calendar year.

On your Dutch salary Dutch wage withholding tax will be withheld. The wage withholding tax (in most cases) can be considered as a preliminary payment of income tax finally due after filing the income tax return. Most tax deductions (e.g. your Dutch main residence) can already be taken into account in the monthly refund of income tax. After the calendar year has ended an income tax return needs to be filed before May 1st of the next year. An extension of time to file can be requested before April 1st, to have the deadline extended till September 1st. If more time is needed you need to contact a professional tax advisor. 

Capital gains (e.g. on the sale of a real estate or shares) interest and dividends are not taxable in the Netherlands. Tax is levied on the balance of your assets minus debts (people in the 30% ruling can request to be exempt for this). As tax is levied on worldwide income the Netherlands has a lot of tax treaties to avoid double taxation.

If you have a company car, each year (a maximum of) 22% (percentage is dependable on CO2-emission of the car and date of first use) of its list price has to be added to your taxable income and will be taxed though your salary. In order to avoid taxation through your salary, in case the car is used privately for less than 500 km a year, you can file for a statement of the Revenue Service to avoid taxation. Driving from home to work and back is not considered to be private use. A log must be kept for each trip.

Individuals owning real estate in the Netherlands or abroad, which is your main residence and not rented out, have to pay Dutch income tax on a deemed rental income. The amount of deemed rental income depends on the fair market value of the real estate. In the Netherlands this is the so-called WOZ-value, the value as determined by the municipality. On the other hand, any expense connected to a loan (for instance a mortgage loan) used to buy or improve the real estate is tax deductible. The most important expense is the interest paid. If your annual income is more than 69.398 euros you cannot fully (or in some cases not at all) deduct these costs. But also other costs (only if connected to the loan) are deductible (e.g. notary fees, bank commission). You have to be aware that only the interest related to finance the purchase or maintenance of the house is tax deductible. Two types of mortgages lead to interest deduction: an annuity or a linear mortgage. The maximum period to deduct the interest is 30 years. When you own more than one property, the other property is part of your Box 3 (passive) income.

Real estate located abroad, which used to be your principal residence and is for sale can lead to a deduction of mortgage interest paid for 3 to 4 years while it is for sale.

Deductible items are medical expenses (over a certain threshold), educational expenses, study expenses, gifts (limited), pension premiums and alimony payments.