First of all, what exactly is a fiscal partnership?
You qualify as fiscal partners if you are married and both registered as living at the same address. You are also deemed to be in a fiscal partnership if you are married but don’t live at the same address, or if you both have a joint pension, own a house together, have a child together, or if you have recognized your partner’s child.
You also qualify if you and your partner have a legally-registered partnership and are registered as living at the same address.
As fiscal partners you can file a joint tax return (you still both need to file a tax return). This means that things like mortgage interest, alimony, tuition fees and so on can be deducted from the partner with the highest income. With this, the deductions offered by the tax office will be higher.
If you pay Dutch income tax and your partner isn’t working, you may be able to get a refund for them.
As fiscal partners, you can also benefit from tax deductions offered for different types of incomes. Your overall income can be taxed in three different categories or boxes. A different tax rate applies per box.
The three categories are:
- Box 1: Income from Work and Home
- Box 2: Income from Substantial Shareholding
- Box 3: Taxable income from Savings and Investments
A quick rundown on tax credits
You are also eligible for tax credits. These are discounts on income tax and national insurance contributions. This means you pay less tax and premiums.
The tax credits you receive depend on your personal situation. Everyone qualifies for the general tax credit (algemene heffingskorting). Even if you have a low income. The general tax credit is calculated by your employer or benefits agency based on your salary, so you receive it automatically.
Everyone can get the general tax credit. If you work, you also receive the employed person's tax credit. This discount is calculated based on your employment-related income.
If you have a job, you’re also entitled to the labor tax credit (arbeidskorting or loonheffingskorting). Your employer also calculates your labor tax credit and applies it to your wages, so you receive it automatically. If you are self-employed, your tax credits will be calculated when you file your annual tax return.
You might be entitled to tax credits if you are on a low income. This will also depend on whether you have a tax partner.
Do you receive tax credits? If so, we’ll take this into account when we calculate the amount of tax you have to pay or receive.
Partial foreign tax liability
If you come to live in the Netherlands and you qualify for the 30% facility for incoming employees, you can opt for partial foreign tax liability. As a partial non-resident taxpayer, you will be regarded as a non-resident taxpayer for part of the income tax.
How does this affect your income tax?
If you file taxes as a partial non-resident taxpayer, you will be subject to full Box 1 taxation on your employment income. You will, however, be taxed as a non-resident on your income from box 2 (Substantial Shareholding) and box 3 (Savings and Investments) which basically means that you will pay less tax.
What if you don’t have a tax partner?
You cannot have a tax partner if you are a foreign taxpayer. In the Netherlands you therefore only pay tax on your own income in or from the Netherlands, and the portion of the assets that you own (your assets minus the debts) in the Netherlands. This means that, if you’re employed, you’re taxed on your wage income. And if you are the joint owner of assets, you will only be taxed on the portion of assets you own.
If you’re a foreign taxpayer, you cannot have a tax partner. This means that, in the Netherlands, you only pay tax on your employment income in or from the Netherlands and on your share of jointly owned assets (assets minus debts) in the Netherlands. If you have a job, you will be taxed on your employment income (Box 1). If you derive income from jointly owned assets, you will pay tax on the share of assets that belong to your partner. (Box 2 and Box 3).