The Dutch tax year runs from 1 January through 31 December.
If both husband and wife are resident taxpayers, they are taxed separately for their business income, employment income, pension income, and other periodic payments less premiums for life annuities and for certain other periodic payments. Spouses and, under certain conditions, persons living as a joint household automatically qualify as fiscal partners. As such, they can choose to allocate the following types of income/deductions to either or both (in any given proportion):
Taxable income from a principal residence.
Taxable income from substantial interest (box 2).
Taxable income from savings and investments (box 3).
Non-business deductions relating to the taxpayers’ personal circumstances.
Tax returns must be filed after each calendar year, in principle, before 1 May.
Payment of tax
If an employee is on a Dutch payroll, wage tax will be withheld from one’s salary. Generally speaking, if taxpayers have sizeable income that is not subject to wage tax withholding, they may be required to make advance payments of estimated additional income tax. When the employee has income tax deductions that are not considered in the Dutch payroll (e.g. [negative] income from a principal residence), it is also possible to file a preliminary tax refund form in order to claim monthly income tax refunds during the calendar year.
Topics of focus for the Dutch tax authorities
During wage tax audits, the Dutch tax authorities' focus is, in most cases, on the taxation and processing of the remuneration of inbound and outbound employees (if applicable). In these situations, they pay special attention to the following topics:
- The reimbursement of expenses, both in the Netherlands and overseas.
- The processing of (foreign) social security contributions and pension premiums paid.
- The way the 30% ruling is included and processed in the Dutch payroll administration on payments and reimbursements made.
- Situations of salary splits and the allocation of income and benefits and taxation rights in the payroll administration.
- The treatment and processing of directors' remuneration.
- The way the company/employer deals with the economic employer concept and the tax implications that may be triggered in the Netherlands for employees seconded to the Netherlands.