Deductions when living abroad with income from the Netherlands
You are a non-resident taxpayer if you live outside the Netherlands but do have Dutch income. These are earnings in the Netherlands that you receive from work and one’s own home (box 1), substantial interest (box 2) and savings and investments (box 3).
Only the income on which the Netherlands may levy tax is of interest to us.
Are you a non-resident taxpayer, or a qualifying non-resident taxpayer? If so, only enter your income taxed in the Netherlands in your tax return. You can request an exemption for Dutch income on which you do not have to pay tax in the Netherlands in your tax return.
You cannot have a tax partner if you are a non-resident tax payer. In that case, you only pay tax in the Netherlands on your own Dutch income and your own part of your capital (your assets minus your debts).
If you are a non-resident taxpayer, you are usually not entitled to:
- the income tax part of tax credits
- personal allowance
- deduction of expenditure on income provisions
You are entitled to tax-free allowance.
We add up the income tax and national insurance contributions on your income in the Netherlands. The total amount will be reduced by the amount of the tax credits to which you are entitled. If you have already paid tax (wage tax or income tax) and national insurance contributions, we will also set them off. The remaining amount is your tax to be paid or refunded.
If you do not live in the Netherlands, we will not tax all your assets. We usually tax your real estate in the Netherlands, such as your holiday home. However, we do not tax your Dutch bank account, for example, or an annuity insurance taken out in the Netherlands.
You must declare the following assets in the Netherlands:
- real estate in the Netherlands
It concerns real estate that is not to be considered as your own home, for example a holiday home or rented property in the Netherlands. If you have your own home in the Netherlands, you must state the income from this in box 1.
- rights to immovable property located in the Netherlands
This concerns rights that directly or indirectly relate to immovable property in the Netherlands, for example a right of usufruct or leasehold.
- rights to shares in the profits of a company in the Netherlands
These are companies whose management is based in the Netherlands. They are not rights arising from securities ownership or an employment relationship. Furthermore, the rights may not previously have been indicated in box 1 or box 2.
Debts relating to Dutch assets are included in the calculation of your assets. Example of a debt: a mortgage loan for a holiday home in the Netherlands.
You pay taxes on your income from your assets, the so-called basis for savings and investments (box 3). This is the value of your assets minus your debts on 1 January of the year for which you are submitting a return, minus your tax-free allowance. We do not tax the actual revenue but a notional return on the value of the basis for savings and investments.
Three brackets in box 3
In 2020, there are three brackets for the calculation of the notional return. You pay 30% of income tax on the calculated notional return.
We assume that you achieve a higher return on your assets if your assets are higher. We also assume that if you have more assets, you invest more than you save. That is why we distinguish two return categories. For that reason, we use a higher percentage for each next bracket in order to calculate the notional return on your assets.
The table below explains the structure of the brackets.
Table of the calculation of return on assets for 2020
|Bracket||Your (share of the) basis for savings and investments
|1||up to € 72,798
|2||from € 72,798 to € 1,005,573
|3||from € 1,005,573
How the return on your assets is calculated
In bracket 1, we calculate a return of 0.07% on 67% of your assets and a return of 5.28% on the remaining 33%.
In bracket 2, we calculate a return of 0.07% on 21% of your assets and a return of 5.28% on 79% of your assets.
If some of your assets fall in bracket 3, we will calculate a return of 5.28% on that entire part.
If you are not subject to tax in the Netherlands for the entire year, the reference date of 1 January will still apply for the calculation of the savings and investments base, but the percentage for the calculation of the national yield will be adjusted proportionately over time.