The Netherlands is one of the more frequently chosen countries to which foreigners go for work. The relatively short distance separating EU countries from the Netherlands, as well as favorable wages, encourage the decision to emigrate for work. However, when going to work in another country, it is important to keep in mind the tax obligations that are incumbent on every person employed there. What does this look like in the Netherlands?
Working in the Netherlands and income tax
On the earnings earned in the Netherlands, income tax is paid. It is taken from your monthly or weekly salary and paid to the tax office, in the form of an advance payment. The mere fact of paying income tax contributions, however, does not exempt the employee from the obligation to make an annual settlement with the tax office.
Who is subject to the tax return obligation in the Netherlands?
If you have worked in the Netherlands but are not permanently domiciled in the country, you are liable for tax return in the following cases.
1. you have received a tax return summons (Aangiftebrief) from the Dutch tax authority (Belastingdienst) - you have to settle your taxes
Aangiftebrief is an official letter addressed by the Belastingdienst to taxpayers who need to settle their income tax. This must be done by a certain date - for the past tax year by July 1 of the current year. If you have received an Aangiftebrief letter from the Belastingdienst, you must file a tax return in the Netherlands, regardless of whether you are due a refund or have to pay a tax surcharge. Importantly, once you receive the Aangiftebrief summons, you must settle with the tax authorities even if you did not work or earn income in the Netherlands in the year indicated. In these cases, a so-called zero return is filed. What is important, however, is the fact of filing the return.
What is the penalty for failing to file a tax return in the Netherlands?
If you ignore the summons you receive, you have to reckon with a high financial penalty that the tax office in the Netherlands may impose on you. Its amount is from 385 to 5278 euros. To avoid paying the fine, all you have to do is settle your tax in the Netherlands on time. If you fail to do so, the office will send you a reminder after a few weeks. From the moment you receive it, you have 10 days to file your tax return. If you fail to do so this time as well, a penalty will be imposed by the office and administrative proceedings will be initiated against you.
(2) You must settle your tax if your refund is more than 15 euros
It may come as a surprise to many foreigners, but the obligation to settle income tax in the Netherlands also occurs if the payer is entitled to a refund of more than 15 euros. Up to this amount of refund, there is no need to settle Dutch tax. However, if the projected refund is to exceed 15 euros, then settlement is mandatory. And in this case, the penalty for failure to complete all the formalities with the authorities will be from 365 to 5278 euros.
3 Mandatory tax settlement in the Netherlands for a surcharge of more than 46 euros
A surcharge on income tax from the Netherlands will occur if the whole year's advance payments turned out to be too small, relative to the calculated value of the tax. Here, however, there is good news. We do a Dutch tax settlement when the amount of the surcharge is equal to or greater than 46 euros. If your calculations show that you have to pay a surcharge of, for example, 35 euros, you do not have to settle with the tax authority.
Is a tax return from the Netherlands mandatory if you want to get the relief?
It is worth remembering that when working in the Netherlands, we are entitled to a number of tax reliefs. A sizable portion of these are child tax credits. In order to take advantage of them, it is necessary to settle accounts with the tax authorities up to 5 years back from the end of the calendar year in which we earned income for working in the Netherlands. It is worth taking advantage of this opportunity, as it can give us up to several hundred euros in refunds. Unfortunately, not everyone is aware that they are entitled to take advantage of many Dutch tax benefits. If you need help, use a functional application for tax settlement from the Netherlands - with our tool you will arrange everything quickly and efficiently.
Try out our Dutch tax refund calculator online 2023/2024 and find out what your return will be for the year. It is an extremely easy and intuitive tool to use – regardless of your salary and status, it ensures that every user will receive the most accurate overpayment calculation. Don't wait and make your tax affairs easier today!
