Taxes in the Netherlands - Part 1

Taxation procedures in the Netherlands may seem (a bit) complicated, especially to newcomers. In this series, we will investigate some of the most common requests and applications.

Social Security Number (BSN)

Internationals who come to the Netherlands to live and work for either a short or extended period of time must obtain a Social Security Number. A BSN (Burgerservicenummer) is the citizen service number - a unique registration number that facilitates any interaction with the Dutch authorities.

From the moment you register at the GBA (Municipal Personal Records Database), you can request your own Social Security Number from the Dutch Tax Office (Belastingdienst). Note that you have to apply in person and only then, you may start working in the Netherlands.

Needless to say that the amount of tax depends on your income. The wage tax is withheld by your employer, and your income tax return should be filed with the Dutch tax authorities.

The M-form

The first year in the Netherlands is the so-called "immigration year" and the immigration tax declaration, M form, must be handed in.

The M form applies to all those who reside for part of the tax / fiscal year (January 1 and December 31).

Note that in case you didn’t receive the M form from the tax authorities, you have to request it yourself.

30% ruling

As you may already know, the 30% ruling is a tax advantage for foreigner employees with specific skills and / or expertise that are scarce or not available in the Dutch marketplace.

If you are eligible for the 30% ruling, you can opt for "partial non-residency status," even though you live in the Netherlands.

Consequently, you will pay less tax since you are considered a non-resident taxpayer and your taxable income (Box 2: interest, Box 3: savings & investments) will be calculated accordingly.

(Preliminary) tax assessment

After you have filed in your Dutch income tax return you will receive a (preliminary) tax assessment, a letter stating the amount of tax you must pay or will receive from the Dutch tax authorities. As expected, if you do not agree with the (preliminary) assessment you can file an objection.

Tax return deferral

If filling your tax return before April 1 doesn’t seem possible, you can ask the Dutch tax authorities for a deferral. Note that in this case, you also have deferral for other requests such as allowances (healthcare allowance, rental, child benefit etc.).

We will delve deeper into issues such as tax return, buying a house in the Netherlands and self-employment in the next article: Taxes in the Netherlands - Part 2. Thank you for reading!

Nico Koppel is an Expat Service Provider, who specialises in tax advice & accountancy. For more information, please comment below or visit Koppel Tax Consultants.