Foreign taxpayers will also soon be required to submit their 2015 income tax returns in the Netherlands. This must be done using a so-called C-bill, but many foreign taxpayers now submit their Dutch tax returns electronically to the Tax and Customs Administration. The tax return software for 2015 is not yet available on the website of the Tax Office. Naturally, VWGNijhof uses tax return software that enables us to prepare tax returns for foreign taxpayers on your behalf.
Foreign taxpayer
A foreign taxpayer is a person whose tax residence is not in the Netherlands, but who receives specific types of income that are linked to the Netherlands.
The tax residence A taxpayer’s status may depend on many different factual circumstances. It must be determined where a person has the centre of their social life.
New
A new rule introduced on 1 January 2015 is that a foreign taxpayer may only claim his or her tax credits and personal allowances in the Netherlands if he or she is a qualifying foreign taxpayer is. This is a taxpayer who:
* lives in an EU Member State, Iceland, Liechtenstein, Norway, Switzerland or in one of our overseas municipalities (Bonaire, Saba or Sint Eustatius) and;
* whose worldwide income is subject to income tax in the Netherlands to the extent of at least 90%.
The world income is all income received by the taxpayer, wherever in the world that income is generated. To enable the Tax and Customs Administration to verify compliance with the 90% requirement, a foreign taxpayer claiming to qualify must submit to the Dutch tax authorities, together with their tax return, a statement of income issued by the tax authorities of their country of residence.
In a letter dated 3 February 2016 In a statement to the House of Representatives, the State Secretary for Finance indicated that taxable income from savings and investments (both domestic and foreign) must also be taken into account when assessing compliance with the 90% criterion.
Germany: new tax treaty
We have a new double taxation agreement with our eastern neighbours, which came into force on 1 January 2016. This treaty is, of course, not yet relevant for the 2015 tax return, but preparing the 2015 tax return is, of course, an excellent opportunity to assess whether the new tax treaty has any implications for the tax and financial position of foreign taxpayers resident in Germany.
Naturally, the new tax treaty may also have implications for residents of the Netherlands who receive income from Germany. See, for example, our article Dutch pension in Germany.
National insurance contributions
Apart from tax, a foreign taxpayer may be liable to pay social security contributions. To determine this, it must be established whether the person concerned qualifies as an insured person. This is not determined by the relevant tax treaty. Within the European Union, an EU regulation must be consulted for this purpose. Outside the European Union, the Netherlands has specific treaties with a number of countries concerning compulsory insurance.