What do you need to be aware of when completing your tax return? A lot of people forget to check their tax return carefully and overlook certain deductions they could have made and/or tax credits they could have taken advantage of.
You may be able to take advantage of tax credits and pay less income tax. More information (in Dutch) is provided on the page Aftrekposten en heffingskortingen on the website of the Tax and Customs Administration .
If you have made any donations (for which you have proof) to one or more officially registered charities in 2022, we advise you to make a list of these donations. If they meet certain conditions, donations are tax deductible. Enter them in Box 1 first. If you still have deductible donations after the income declared in Box 1 has been reduced to zero, you can settle these in Box 3 and subsequently in Box 2. You must distinguish between ‘one-off’ donations and ‘periodic’ donations. In the case of the latter, the obligation to make donations is laid down in a contract or a notarial instrument of donation.
If you make donations to one or more public benefit organisations (known as ANBIs in Dutch) that have been designated by the Tax and Customs Administration as a cultural organisation, you can increase the value of your donation by a certain percentage on your tax return. For tax purposes, you can increase the value of periodic and other donations you made privately to cultural public benefit organisations in 2022 by 25%, up to a maximum of €1,250. You will reach this maximum if you give at least €5,000 to cultural public benefit organisations in a calendar year.
A different arrangement applies to personal deductions. This concerns, for example, spousal maintenance you’ve paid, specific medical expenses and deductible donations. If you can deduct these costs above a certain threshold, you can first deduct them from your taxable income in Box 1 and, if any remains, from your taxable income in Box 3 and then from your taxable income in Box 2. You can settle the remainder in your tax return for next year.
If you borrowed money in 2022 from your company, a family member or another person to be able to buy your home, bear in mind that you may be required to provide details of this loan on your tax return. Deduction of the interest and other costs in relation to such loans is conditional on, among other things, you being under an obligation to make repayments on the loan throughout the loan term. This is because the Tax and Customs Administration needs to be able to check that you have made sufficient repayments on this loan.
Box 1 is important to you if you have, for example, temporarily rented accommodation to third parties for a short period of time (‘short let’). This is explained in more detail in the article (in Dutch) ‘ Uw woning verhuren: hoe zit het juridisch en fiscaa l?’ (Renting out your home: what about the legal and tax situation??).
On 24 December 2021 , the Dutch Supreme Court ruled that the tax relating to gains from savings and investments (Box 3 of the tax return) is not acceptable in its current form. That is why the government has introduced a new calculation method for the years 2021 and 2022. During this period of restoration of rights, the new calculation method is compared with the calculation from the old system. The calculation that is most favorable to you will be applied. At the moment you receive a tax assessment, you can file an objection to it (keep the objection period in mind though). More information about the way in which your assets are taxed in box 3 can be found on the website of the Dutch Government (in Dutch).
Consequences of the Supreme Court ruling on box 3 for the 2022 income tax return (in Dutch)
Box 3 of the tax return is where gains from savings and investments is taxed. In 2022, the general exemption in Box 3 (the tax-free allowance) is €50,650, while the exemption for partners for tax purposes jointly is double that amount, i.e. €101,300. You do not have to pay any income tax on amounts declared in Box 3 that stay below this threshold.
Despite the fact that the tax-free allowance has been increased to €50,650, taxpayers with Box 3 gains of €31,747 or more must include these in Box 3 on the tax return for 2022. The reason for this is that the Dutch government wants to prevent the increase in the tax-free allowance from affecting the means test in many means-tested (i.e. income related) schemes. If it were to have effect, more people than intended would qualify under a means-tested scheme or receive more/pay less under such a scheme. Special arrangements intended for low-income individuals/families include the healthcare allowance, the child budget, the childcare allowance, the personal contribution for the Long-term Care Act and more. All taxpayers with Box 3 assets pay a fixed rate of return on these assets. Different fixed rates apply depending on which of 3 brackets the total amount of these assets fall under. In 2021, the total assets under this box are taxed at a rate of between 0.59 and 1.76%.
In principle, tax debt is not debt you list in Box 3. An exception is inheritance tax debt and, under certain conditions, tax debts from a provisional income tax assessment. This is explained in more detail (in Dutch) on the ‘Belastingschulden’ (Tax debts) page on the Dutch Tax and Customs Administration’s website.
If you pay spousal maintenance to your ex-partner, the amount you pay will generally be tax deductible. Your ex-partner must declare the same amount as taxable income on their income tax return. Child maintenance is not tax deductible, nor is it considered a form of debt for the purpose of Box 3 either.
If you have moved out of your home on account of a planned or completed divorce while your ex-partner continues to live there, you will be able to continue to use the mortgage interest deduction for your share of the ownership of the home for a maximum of 24 months after you move out. You must then also declare the imputed rental value for your share of the ownership over that same period. This is balanced out by a spousal maintenance deduction of the same amount. After all, you have granted your ex-partner the benefit of occupying the property.
Given that the death occurred in 2022, this means that at 00:00 on 1 January 2022 you did not have any inheritance tax debt relating to this death yet. You can include this debt in your 2023 income tax return, which you can file with the Dutch Tax and Customs Administration from March 2024 onwards.
If so, you can generally include the amount of this debt in Box 3 of the tax return, regardless of whether you had already received an inheritance tax assessment from the Tax and Customs Administration for this.
You may be self-employed or even run a private limited company (BV), for example, in which case you may be eligible for a deduction for your business. This is subject to strict rules. The Tax and Customs Administration has developed a tool (in Dutch) to assess a limited number of possible situations.
If you have borrowed funds from your company, you owe your company money and consequently pay your company interest. This is debt that you must declare in Box 1 or Box 3 of your tax return. If you use the loan to buy, renovate or maintain your home, this loan should in principle be declared in Box 1 as it will then be considered home acquisition debt. The loan also goes in Box 1 if you have used the amount borrowed to buy an asset that you subsequently made available to your company. In all other cases, the debt will generally go in Box 3. If you have lent money to your company, you have a receivable from your company that, in principle, goes in Box 1.
If so, you do not have to declare the interest if the balance has not exceeded a credit amount of €17,500 and has not fallen below a debit amount of €17,500 at any point in the year. You will then not have to declare any current account debt in Box 3 either.
The information on our website about submitting your tax return applies to people who are liable for tax in the Netherlands . If you have not received an ‘aangiftebrief’ (notice of obligation to submit a tax return), or do not know whether you need to submit a tax return, check with the Tax and Customs Administration (Belastingdienst).
