Top 9 Tax Return Questions Answered
30.03.2021Spring is the time for the awakening of nature and ... the period for filing tax returns!
Dear friends! As the first month of spring is coming to an end, it is high time to think about filing tax returns, if you have not already done so. This year, the deadline for filing declarations has been extended, but do not relax too much.
Below we will answer 9 top questions about private tax returns
1. Do you have to file a tax return?
If you live in the Netherlands, you automatically become taxable, but this does not mean that you have to file a tax return. If you receive a letter from the tax office inviting you to file a return, this is tantamount to telling you that you must file it, regardless of the expected outcome. If you have not received letters from the tax office, but you think you are eligible for a tax refund, take the initiative and file your tax return yourself.
2. How much does the tax service pay to individuals?
As of 2021, the tax office pays amounts starting from 16 euros, and asks for amounts starting from 48 Euro. This means that if, according to the results of filling out the declaration, it turns out that you have to pay less than 48 euros, the tax office will forgive you this amount.
3. What type of declaration do I need to file?
If you have lived in the Netherlands for the whole year (in this case, it means registration with the city hall at the place of residence), you submit an ordinary electronic declaration, form P. If you have lived in the Netherlands for only part of the reporting year (that is, you were registered or discharged in the reporting year) , you need to fill out form M. This form is filled in paper form, or if you order it from us, then we send an electronic version of the form. A paper version of the form can be requested from the tax office by phone or sent a written request by mail. The form is sent for a rather long time, about 6-8 weeks, so the deadline for submitting reports for foreigners is 2 months later. If you have lived abroad for the entire reporting year, but are a Dutch taxpayer (have income in the Netherlands), then you need to fill out Form C, which exists in both electronic and paper forms.
4. Submit the return together or separately with your partner?
To get the final result, it will not matter how you file the return - jointly or separately. For calculations, only information about the compliance of your partner with the concept of a fiscal partner is important. In some cases, it is not possible to submit a joint declaration. For example, if one of the partners is a newcomer. In this case, form M will be filled in for one of the partners, and form P for the second. If both partners are newcomers, then form M is filled in for each partner. If one of the partners is an entrepreneur, then it is possible to submit a joint declaration, but it is will be more time consuming. This is due to the fact that a partner-entrepreneur must submit an extended declaration, which includes, in addition to the standard private part, also a report on the profit of the enterprise. Regardless of whether you submit a joint declaration or do it separately, each of the partners will receive own solution. But even if you are filing a declaration only for yourself, you need to indicate your partner in it, because the income and benefits of both partners affect each other.
5. Deadlines for filing a declaration
The standard deadline for filing a declaration is from March 1 to April 30 inclusive. There are exceptions, for example, this year (2021) due to technical problems, the deadline for filing a declaration has been postponed from May 1 to May 8, 2021. If you do not have time to collect documents or for some reason do not have time to submit a declaration, it is possible to request a deferment of 4 months (i.e. until September 1 of the current year). If you request a deferment through a tax consultant (for example, with the help of our company), you will receive a deferment for 12 months (i.e. until May 1 of the next year). Almost everyone has the opportunity to get a deferment; the main thing is to have time to request it before May 1 (or May 8 in 2021), and also not be on the list of violators. For example, if you have filed late returns twice in the previous three tax years, you will automatically be placed on the delinquent list and will be denied an extension. If the violation occurred only once within three years, your request will be granted. You can request a deferment from February 7th.
6. Deadlines for processing declarations and deadlines for receiving payments
It makes no sense to submit a declaration earlier than the specified deadline, since the tax office receives all data from employers and banks only on March 1. All submitted declarations in the Netherlands are considered not in the usual order of priority, but according to the BSN numbers of the declarants. This gives you the opportunity to calmly collect all the necessary documents, while waiting for the receipt of the annual reports (Jaaropgaaf) of your employers. Keep in mind that even if you only worked for one day or were on sick leave for at least one day, you must receive an employer's annual report or a report on sickness payments from UWV. Even such a small income cannot be ignored in the tax return. After March 1, the tax office will have all the data on your income, and only then can we check this data for you. Therefore, if you are not sure if you remember all your earnings, it makes sense to provide us with your Digi code. By law, the processing time for a declaration is three months. That is why the tax office promises to process all submitted returns on time by July 1, but in practice it often happens differently. The same law allows the tax office to extend the period for consideration of the declaration up to two years. Forms M and declarations containing many different tax deductions are considered especially for a long time. After receiving a letter from the tax office with an approved calculation, the money will be credited to your account within a week, or vice versa, you will receive an invoice for the payment of the unpaid part of the tax. The standard term for payment of income tax is 6 weeks.
7. Penalties
If you received a letter from the tax office, but did not file a return, you will first receive a reminder with the recommended deadline for filing a return, which is usually 1 month. If you ignore the first reminder, you will receive a second reminder asking you to submit your return within 5 business days. In case of violation of this deadline, you will face a fine of 385 to 5514 euros for not filing a tax return, or for filing late. In addition to the fine, the amount of unpaid tax will be calculated, set at the discretion of the tax service itself, as well as the penalty incurred during this time. Dutch tax legislation provides for a penalty not only for a late filed tax return, but also for incorrect data specified in the tax return, as well as for an untimely paid tax amount.
8. What if you filled out the declaration incorrectly?
If you find an error before April 30 (May 8 in 2021), you just need to submit a new declaration, the previous one will be automatically canceled. If you find an error after April 30 (May 8 in 2021), but even before receiving a calculation from the tax, as in the first case, just submit a new revised declaration. You will receive a new advance calculation, in which there will be several corrections, but nevertheless, the result will be correct. If you find an error after receiving the final calculation from the tax office, you can still change the declaration, but for this there is a special procedure, which we advise you to carry out with the help of a specialist.
9. What do you need to know in order to get the most profitable result from filing a declaration?
If you are eligible for a tax refund, we strongly recommend that you contact a professional. The tax legislation of the Netherlands is quite complex and it will be difficult for a person without special training to take into account all the subtleties. The amount you paid to a specialist for filing a declaration almost always pays off. A tax consultant will take into account all possible deductions, make the necessary optimization of your taxes, and also suggest the correct distribution of the tax burden between partners. Including, he will tell you what other benefits or subsidies you can count on. Nalog.nl employees are always ready to help you fill out any tax documents and provide the necessary information on all your questions.
