Things you need to know about filing your 2017 Dutch income tax return

PUBLISHED: 3rd January 2018

It is that time of the year again. The calendar year 2017 has finished and even though you have flushed it away with champagne, it is still time to wrap up your tax affairs for 2016. We call it the 2017 tax return season! Read all about it in this blog.

When do I need to file a tax return?

There are two situations where you must file a Dutch tax return.

1. If you are invited to do so

The first one is if you get a letter from the Dutch tax authorities requesting you to file a Dutch income tax return for 2017. This letter will be sent via regular mail in the famous blue envelope. Taxpayers with a DigiD and MijnOverheid account will also receive a notification in their electronic message box (Berichtenbox). It is recommended to set this up because if the envelope gets lost, you will be considered to have received it anyway in most… You can install handy e-mail alerts for new posts as well.

When you received a blue envelope, you must file a tax return. Even if there is no income to report. And even if there is no tax payable.

2. If you owe the tax authorities money

If you don’t get a letter, you still need to file a tax return if you owe the tax authorities more than EUR 45. In that case, you have an obligation to file a tax return. You may owe money for instance if you have Savings and Investments (Box 3) above the threshold, if you have income from other activities or if the wage tax withholdings made by your employer were insufficient.

If you are not sure if you owe money and whether you should file a tax return, it makes sense to prepare a full tax return to validate this. This way, you limit your exposure and risk for penalties and interest. If you only have employment income, you may use free tax calculator to get an indication of the amount due.

If you have not received a blue envelope and you owe the Dutch tax authorities EUR 45 or less, there is no obligation to submit a tax return.

3. Bonus: file it when you expect money back!

There are a number of situations where you don’t have an obligation to file a Dutch income tax return, but it is actually smart to file a Dutch income tax return: namely if you expect to receive a refund! For instance if you have certain tax deductions. Or if the wage tax withheld is higher than the income tax payable. This may be possible for example if you only started or ended your employment activities during the year. A final one, and often missed, is if none of the above applies but in case the tax year would be subject to leveling out taxes over three years (“Middeling”), as you would require a final tax assessment to do so. Leveling out may be opportune in case of significant fluctuations of taxable Box 1 income over those 3 years.

Again, if you only received employment income, you may use our free tax calculator to get an indication of your refund. Note that refunds under €15 will not be paid out!

If you do expect a refund and wish to make use of a tax advisor instead of filing yourself, of course you need to offset the costs against the benefit.

What is the deadline for filing my tax return?

The official deadline is April 1st, but for the deadline for filing your 2016 Dutch income tax return has been extended until May 1st, 2018.

In some cases extension of the filing deadline may be possible. Generally, registered tax advisors can obtain extension for their client portfolio.

If you file your tax return before April 5th, the Dutch tax authorities guarantee that they will issue a preliminary assessment before July 1st, 2018. This way, you are guaranteed to receive your refund swiftly, or, in case you need to pay an additional amount, you may avoid paying interest.

If you file your Dutch income tax return after April 5th, interest may be due and if you file it after the deadline of May 1st, even penalties may be due..

How can I file my tax return?

You can do it either electronically, or by filing a paper version. The tax authorities will assume you do it electronically. So if you want to file a paper tax return, you need to request one by calling the BelastingTelefoon (0800 0543). If you are an entrepreneur, you will not have the option to file a paper version, filing an electronic tax return is mandatory.

When you file your tax return electronically, you can use the software of the Dutch tax authorities. If you hire a tax advisor, they will usually work with their own customized (SAAS) software.

Besides helping them to manage their processes and deliver a smooth service, this allows for some more flexibility to take into account the specific situation of the client. The software of the Dutch tax authorities is sophisticated, but is one-size fits all and offers little flexibility. The tax authorities have programmed their point of view on how tax legislation should be interpreted, which not necessarily is the same as what a court would say. The customized (and approved) software used by tax advisors allows some more flexibility to take defendable tax positions.

As of when can I file a tax return?

Filing tax returns will be possible as soon as the Dutch tax authorities have released their tax return software. This will not be before March 1st of 2018.

Alternatively, it is possible to have your tax return prepared by tax advisors as soon as their customized software is released, which is expected before March 1st. However, submitting the tax return will not be possible before the Dutch tax authorities open their receipt portal. Until then, prepared tax returns will be put in electronic holding, to ensure they are submitted at the earliest moment possible. We will update this blog once the customized software is available.

Is there anything I can do in the meanwhile, now tax returns cannot be filed yet?

Yes of course! You can start by compiling all relevant data. Use our handy checklist to do so. Click here for the checklist.

What type of tax return do I file?

There are of number of different tax forms, each with a specific purpose. The most common are:

P: for normal full year residents
C: for non-resident
M: for part year residents (immigration and migration)
O: for entrepreneurs
You should use the form that suits your situation. Note that if you received a blue envelope, you should in principle file the return mentioned on the invitation. If this form is incorrect, you need to request for a change of form (and this needs to be administered in the tax authorities systems back-end) before filing the correct form, otherwise your tax return will be rejected.

Finally

We wish you a happy tax return season!