Dutch Income Tax Return 2021

Dutch income tax rates - box 1

NON-RESIDENT INCOME TAX RETURN 2021

A nonresident may opt to be treated as a resident taxpayer for their non-resident income tax return 2021, provided that you are a resident of the EU or of a country that has signed a double taxation treaty with the Netherlands. Dutch tax authorities (Belastingdienst) may wish to tax recipients of Dutch sourced income, but whether Dutch tax authorities mag actually do so depends on the provisions set out in a tax treaty for the avoidance of double taxation in many cases.

TAX RATES INCOME TAX NETHERLANDS

The Dutch tax authorities distinguishes three types of income that are subject to personal income tax. Classified under “Box 1”, “Box 2” and “Box 3” income.

  • Box I income includes profits, employment income, income from other activities and income deemed to have been generated from residential home ownership.
  • Box II income includes income from shares in case of substantial interest of 5 percent or more.
  • Box III income includes income from savings and investments.

Each box has its own rules for determining the tax base and its tax rate. Income in Box 1 taxed at a progressive rate with a maximum of 49,50% in 2021.

TAX RATE 2021 BOX 3 INCOME TAX NETHERLANDS

You pay tax on your income from your assets: the so-called savings and investments basis (box 3). This is the value of your assets minus your debts on 1 January of the year for which you file your tax return, minus your tax-exempt assets. The Dutch tax authorities (Belastingdienst) do not tax the actual return, but a notional return on the value of the savings and investments basis.

Tax rates

Basis

save and invest

Percentage

0,07%

Percentage

5,28%

Percentage

average profit

1

 

up to € 72.798

 

67%

 

33%

 

1,789%

 

2

 

from € 72.798 to € 1.005.573

21%

 

79%

4,185%

 

3

 

as from € 1.005.573

 

0%

100%

5,28%

 

How do they calculate the return on your assets?

In 2020, there will be 3 brackets for calculating the fictive rate of return. You pay 30% income tax on the calculated fictive return.

  • In tranche 1, they calculate a return of 0.07% on 67% of your capital, and a return of 5.28% on the remaining 33%.
  • In tranche 2, they calculate a return of 0.07% on 21% of your capital, and a return of 5.28% on 79% of your capital.
  • Does part of your capital fall in tranche 3? If so, they calculate a return of 5.28% on that part as a whole.

INCOME TAX RETURN SERVICE 2021

Within expat service are tax advisors and tax specialists with a lot of knowledge and experience in the field of personal income tax returns for expatriates and internationals. By having us draw up your tax returns you avoid paying too much or too little tax. In most cases we can achieve significant tax benefits that will benefit you financially.