This is according to an article published in the Financieel Dagblad at the end of March. State Secretary Vijlbrief of Finance writes in answers to parliamentary questions that the Tax and Customs Administration does not assess whether tax returns lead to the best possible outcome for the taxpayer.
Joint income components
This concerns the option for tax partners to freely allocate certain joint income components between themselves. The only condition is that the entire income component must be included in their income. If the partners do not make a choice, joint income components are divided 50/50.
The components of joint income that may be freely distributed are:
- taxable income from one’s own home;
- income from a substantial interest (Box 2);
- maintenance obligations;
- specific healthcare costs;
- weekend activities for people with disabilities;
- training costs;
- tax-deductible donations;
- the tax base for income from savings and investments (Box 3);
- the dividend tax to be treated as withholding tax.
Choosing
Tax partners may choose their preferred allocation until the final tax assessment for either of them becomes final. A tax assessment becomes final when the period for lodging an objection has expired without being used. The period for lodging an objection ends 6 weeks after the date of the tax assessment.
Generally speaking, the choice is made in the tax returns. The software used to prepare the tax return allows the choice of allocation to be made. Commercial tax return software usually includes a tool that can be used to calculate the tax-optimised allocation. The Tax and Customs Administration’s software does not include such a tool.
The financial implications of this choice range from a few tens of euros to several thousand euros. It is therefore certainly worth taking a close look at this (or having someone look into it for you). Which allocation is most advantageous depends on your specific circumstances. In addition to the tax rate, tax credits also play a role, the amount of which depends on your income. In tax brackets 2 and 3, the rates are proportional, but in tax bracket 3, it is possible to gain an advantage (or avoid a disadvantage) when calculating the flat-rate return.
One consequence of a chosen allocation that is sometimes overlooked is that one tax partner may pay tax, on which tax interest is charged, whilst the other partner receives a tax refund, which is not increased by tax interest.