Moving…. For one person it is almost a hobby and that person moves regularly. For most people this is a stressful event.
Moving to another country, for example the Netherlands, has even a bigger impact on your personal life: new country, different language, other tax regulations, is there something I need to arrange before immigration, what are the attention points, are there any financial consequences? Most of the times these questions are not at the top of your priority list.
Recently I spoke to a foreign client who moved to the Netherlands and bought a Dutch primary residence property last year. He had the intention to enjoy his retirement in the Netherlands. Unfortunately, he did not know that the Netherlands has its own tax rules. In the Netherlands he needs to pay more taxes on his foreign pension income compared to his previous residency state. As a result, he had less money to spend during his retirement than he thought in advance, a major setback.
Change of tax obligations
Often people forget that after immigration to the Netherlands the tax residency status also changes. In general, after immigration your (Dutch and foreign) sources of income will be taxed in the Netherlands. Fortunately, the Netherlands has a tax treaty with most countries, so the same source of income will not be taxed in two countries. The question remains: is a source of income taxed in the Netherlands or somewhere else? An important attention point is that sometimes a beneficial tax regulation in another country will lose its effect after immigration to the Netherlands and you need to pay taxes on that source of income in the Netherlands. As a result, it can give you financial problems as your nett income will be lower than expected. Similar to the situation with my client.
There are more important questions people often forget. Is your partner joining you in the Netherlands? Registering in the Netherlands at exactly the same time can be beneficial. Have you checked whether you meet the conditions for applying for the 30% ruling? Do I need to pay certain costs after immigration, or should I receive certain income before immigration? Am I socially secured in the Netherlands?
Prevent surprises and check in advance if there is something you need to consider?
Are there any tax benefits when moving to the Netherlands?
In general, in the year of migration you might be entitled to a tax refund! The reason is that the monthly wage tax withholding by your Dutch employer is based on your annual income. When you process your Dutch income tax form you declare your actual received income. Due to different tax rates and brackets, it is possible that this will result in a refund. This does depend on your migration date and your received income. Do I now also need to file a tax return?
No stress! We would be happy to assist you with your Dutch income tax form or with your Dutch tax related questions after immigration.
In my experience most “expats” have a lot of questions regarding their tax obligations, and they would like to prevent any problems with a foreign tax office. Seeking advice in advance, hopefully reduces stress and surprises. As the Dutch tax office states “we can not make it more enjoyable for you, but we can make it easier”, that is something we would like to do for all our clients. Hopefully, this will make you feel at home here sooner.
Would you like your (future) immigration to the Netherlands to be less stressful? Please download our whitepaper or contact one of our advisors at tax@aame.nl or +31 (0)152158815. Would you like to receive the latest news after immigration? Please register for our English newsletter.