Filing your Dutch taxes: The 2023 guide

Wondering how to file your taxes in the Netherlands in 2023? The team at J.C. Suurmond & zn Tax consultants are here to make sure you are up to date on everything and know how to gain maximum tax benefits!

Circumstances can be hard if you are an expat, living in a foreign country where different, unknown rules apply. Your tax situation, for example, can be much more complicated than you would have expected. With the high inflation rates and new government reforms, it is worth the extra effort to be on top of your tax situation.

Did your 30% ruling end in 2022?

Did your 30% ruling end in 2022? You are now regularly taxable in the Netherlands, also for your worldwide assets (Box 3 tax), so don’t forget to declare these in your tax return!

Box 3 tax developments

Following the Supreme Court decision on Box 3 from December 2021, the Tax and Customs Administration (Belastingdienst) was given the task of developing a levy based on actual income rather than the current fictitious levy on assets.

In the new method, the actual composition of assets is taken into account to reflect the actual wealth situation. A fictitious return is still assumed for the various asset categories. Additionally, the return on savings has been substantially reduced based on actual interest rates, resulting in very little tax.

However, all other assets are taxed at the highest rate. Since the fictitious return on other capital is calculated based on the highest percentage, the new calculation is not necessarily more favourable in all situations. As bank accounts are taxed at such a low rate, the new system is more favourable if your assets consist of comparatively more bank accounts than other assets.

A qualified tax advisor can inform you about Box 3 developments and advise you on actions that are possible in your situation.

Limitation of 30% ruling for high wage earners

From January 1, 2024, the 30% rule for incoming employees will be limited to the WNT norm (also known as the Balkenende norm). In 2022, this norm will be 216.000 euros on an annual basis and 223.000 euros in 2023.

There is a transitional arrangement for incoming employees for whom the 30% rule was applied over the last pay period (December) of 2022. For existing 30%-ruling cases, the capping of the 30% rule only applies from 1 January 2026, instead of 1 January 2024. For instance, if you were planning to give an incoming employee a salary above the WNT norm early next year, the employee will benefit from an additional two years if the employment already starts as of December 1, 2022.

Request a provisional assessment on time

Do you expect to pay tax for the 2022 or 2023 tax year? If you request a provisional assessment in time, you can save on tax interest. You need to request the provisional assessment six months after the end of the calendar year (July 1, 2023). After that, you will pay tax interest of at least 4 percent.

To ensure that the assessment is imposed in time, it is recommended that you apply for it before April 1, 2023. Also, the assessment for the 2022 tax year must be paid at once. For the 2023 tax year assessment, you may pay in instalments.

Work from home allowance

Due to the COVID crisis, more and more employees have continued working from home and this indirectly costs them more money (e.g., energy, food and coffee consumption). Thus, the Dutch cabinet has decided to introduce a tax-free working from home allowance.

As a result, employers can reimburse a maximum of 2 euros per day or part of a day worked. The tax-free travel allowance of 0,19 euros per km will continue to exist and will be raised to 0,21 euros. The allowances cannot, however, be paid at the same time. Per day, you can either opt for payment of the work from home allowance or payment of the travel allowance.

Reduction in tax deduction for higher incomes

If your income falls in the highest tax bracket, it is advisable to pay deductible items such as gifts or healthcare costs this year.

Taxpayers whose income fall in the highest bracket in Box 1 will gradually have less tax advantages from deductible items such as:

• Alimony
• Gifts
• Mortgage interest
• Specific healthcare costs
• Weekend expenses for disabled children

In 2023, the highest rate at which virtually all deductible items are to be deducted has gradually been decreased to 37,03 percent.

Lennart Suurmond is a tax advisor at J.C. Suurmond & zn. Tax consultants. Need advice on the best way to file your 2022 tax return or proactive tax advice for the coming years? Get in touch to present your situation.