Foreign-based tax payers

If you are a Dutch tax payer who is based abroad, when filing your income tax return for 2015 you may well find yourself facing new tax rules. The central question is whether or not you are regarded as a “qualifying foreign-based tax payer”.

If as a non-Dutch resident you earn 90% or more of your income within the Netherlands, this makes you a qualifying foreign-based tax payer. One of the things this does for you is enable you to seek tax relief against your Dutch-earned income on your interest payments on the mortgage loan for your owner-occupied (foreign-based) home.

If your partner is a qualifying foreign-based tax payer, his or her share in the interest on the mortgage loan may be used for tax relief. If your partner does not in his or her own right qualify as a foreign-based tax payer, he or she will still qualify on condition that at least 90% of your and his or her aggregate income should be earned within the Netherlands.

Your and your partner’s failure to meet the new requirements will result in your forfeiting the mortgage interest relief as well as losing the option of deducting medical expenses, annuity payments and maintenance pay.

As it is not yet clear whether the new regime tallies with European regulations, we would advise you to lodge objection to your final income tax assessment if you or your (life) partner are just shy of complying with the “90% of domestically earned income” criterion.

Income tax returns for 2015 may be filed from 1 March 2016 onwards, until 30 April 2016 as the (hard-and-fast!) deadline.

Ask your tax consultant in Amsterdam to lend you a hand!