What is the Dutch income tax return?

At the beginning of each year, you must file your income tax return in the Netherlands, declaring your income, assets and deductions. If you have a Dutch income and have lived in the Netherlands throughout the year, you can submit your tax return online. Usually, you’ll receive a reminder from the Belastingdienst (the blue letter!) when it’s time to file your income tax return. You’ll log into your MijnBelastindienst-Account with your DigiD and fill in the forms waiting for you. Typically, a lot of data is prefilled, like the salary you received or the heffingskorting etc. Suppose you have the correct data at hand and your financial situation is simple (e.g. you’re not a house owner, didn’t make any investments etc.). In that case, filing income tax returns in the Netherlands is straightforward and doesn’t take too long. The downside of the digital forms is they are only available in Dutch.

If you haven’t lived in the Netherlands throughout the whole year but earned within your first Dutch year, you must fill in the M-Form (Migration income tax return form).

Do I have to pay income tax in the Netherlands?

As soon as you get your BSN, you are belastingsplichtig, meaning you must pay taxes in the Netherlands. Simply put: As soon as you receive a Dutch salary, you must pay income tax in the Netherlands. However, the Dutch tax authority (Belastingdienst) usually tells you whether you must file your tax return. As soon as you receive a declaration letter (aangiftebrief) from the Belastingdienst, you are obligated to file your tax return for the Netherlands and pay the taxes that result from the calculations. But no worries, you often receive some money back after filing your tax return. Hence, it might be worthwhile to proactively check whether you can file your tax return in the Netherlands even though you have yet to receive a letter from the Belastingdienst. However, in our experience, this case is scarce.

How does income tax in the Netherlands work?

The payroll tax is withheld from your salary each month in the Netherlands. The income tax in the Netherlands is deducted automatically from your pay, and you’ll never actually see the money in your bank account. However, the withheld amount is always determined in advance and can change over the year. Also, in the preliminary calculation, the tax authorities have yet to consider any tax deductions. You may get some money back after the final calculation. Therefore, you must declare the exact numbers with your income tax return at the beginning of each year.

What are the deadlines for income tax returns in the Netherlands?

The fiscal year runs from 1 January to 31 December in the Netherlands. You always file your income tax returns for the previous year. Hence, at the beginning of 2023, you file for 2022’s taxes. The deadline for submitting the forms is 1 May unless you request an extension. You can do this by contacting the Belastingdienst (click on Uitstel aanvragen). However, in many cases, you’ll receive some money back, so why procrastinate?

You can submit the tax return from 1 March, which leaves you a window of two months. If you submit your tax declaration before 1 April, you’ll receive a message by 1 July about whether you’ll get some money back. Make sure you meet the deadlines, as otherwise, you’ll have to pay a fine.

What documents do I need to file the tax return?

Having all the necessary data at hand before filing your tax return makes the whole process much more manageable. Ensure you’ve applied for your DigiD and your BSN in time and have it ready. Furthermore, you’ll need all salary data from the previous year (an annual statement or payslips) as well as the annual statements of your bank account(s).

Here’s a detailed list of all data you need for your tax return. It also includes significant health costs, records of received or paid alimentation, all relevant documents if you’re a house owner, and records of debts, loans and benefits.

If you are married or in a registered partnership, you’ll file the tax return with your partner. Make sure you have both of your data ready.

What is Loonheffingskorting?

If you receive a Dutch salary, you are entitled to certain tax credits on your income tax in the Netherlands: Loonheffingskorting. Everyone working in the Netherlands is entitled to the general tax credit (Algemene heffingskorting). If you receive a Dutch salary or profit from a Dutch company or other activities, you are entitled to an employed person’s tax credit (Arbeidskorting). If you are regularly employed, these tax credits are directly deducted from your monthly salary. Your employer or paying institution usually arranges this for you; you don’t have to apply for it separately. Usually, you must fill in a form as soon as you start at the new employer.

Do you have multiple employers? Or do you receive other benefits? Only apply the tax credit to the employer where you earn the most. Otherwise, you risk receiving too much Loonheffingskorting, which you’ll have to pay back afterwards.

Which contributions to Social and Healthcare Insurance Act do I have to pay?

If you work in the Netherlands or for a Dutch employer, you must contribute to the Social and healthcare insurance act. For social insurance, you contribute to the AOW, Anw and Wlz, which cover benefits for persons unable to work. Next to social insurance, you pay an income-related contribution to the healthcare system in the Netherlands (=Bijdrage Zorgverzekeringswet). Your employer is withholding a certain amount of your monthly income for taxes ( = Loonheffing), thereby also considering the contributions to the social and healthcare insurance act. If you work as a freelancer, you must pay the contributions as soon as you file your annual income tax return.

Your employer may withhold too much insurance contribution throughout the year, and only when you file your income tax declaration is the definite amount determined. Therefore, you may get some money back after filing your income tax return in the Netherlands or worse case that you’ll have to pay extra.