Tax in the Netherlands Part 7

This article continues our series on taxation in The Netherlands. In previous articles we discussed the filing of the income tax return, tax issues for self-employed professionals and buying a house in the Netherlands.

In this article we will elaborate on the following subjects:
• Inheritance and gift tax;
• Upcoming change in VAT rate;
• Update 30% ruling.

Inheritance tax
If you receive an inheritance the tax authorities do not withhold the tax payable so you may need to pay the inheritance tax (erfbelasting) yourself. Inheritance tax or estate tax is levied on the beneficiary’s share of the estate and the tax is generally paid by the beneficiary. In general the inheritance will be taxed in the country of the deceased. For expats this means that if they receive an inheritance from abroad they will usually pay tax outside the Netherlands. This also implies that if someone is a Dutch resident at the time of passing the tax authorities will tax the heirs through the Dutch tax system.

Different tax rates apply, depending on the relationship between the heir and the deceased.
There are three categories:
• spouses, registered partners and children;
• siblings, parents and other direct ascendants;
• other beneficiaries.

There are several instances in which a portion of the inheritance is given tax-free in the Netherlands. For example: the first Eur. 603,600 which a spouse inherits is tax free. For children there is a tax exemption for the first Eur. 19,144.

Filing the inheritance tax return
If inheritance tax is payable you are required to file an inheritance tax return. An heir can only declare their own inheritance tax return, but the heir(s) can also appoint someone to file the inheritance tax return for all heirs. As tax consultants we can help you to guide you through this difficult and painful process. Feel free to contact us about your tax matters related to inheritance tax.

Cross-border inheritance tax problems
The European Commission proposes measures to tackle cross-border inheritance tax problems since several Member States may claim taxing rights on the same inheritance or tax foreign inheritances more heavily than local inheritances. At the moment there are no measures to address this double taxation problem. This is on of the main reasons why you should contact a tax expert: there may be international tax treaties which apply to your particular tax situation.

Inherited goods from abroad
Did you inherit goods from somebody living in a non-EU country and do you wish to import these goods tax-free into the Netherlands? Then you need an exemption permit for inheritance goods. You can apply for the permit at the regional customs office where you live or at the regional customs office where you received the inheritance goods. If you are moving to the Netherlands from another EU country then, in general, you do not have to make a customs declaration for moved goods or personal goods.
Feel free to contact us to discuss your situation and to arrange an exemption permit for inheritance goods from abroad.

Gift tax
Gift taxation (in the Netherlands known as Schenkingsrecht) works basically the same way as inheritance tax. Gift tax is levied on all gifts donated by Dutch residents. On gift tax there are several exemptions and rates as well. If you would like to make a gift in the Netherlands and would like to have a professional look at your tax situation, please contact our office.

Upcoming change in VAT rate
As of 1 October 2012 the general VAT rate of 19% will increase to 21%. With respect to this Minister Weekers has given guidelines on how to proceed if services will be provided after September 30th 2012.
Please view our article published on August 27 www.koppelservices.com/newsflash/vat-value-added-tax/change-vat-rate/

Update 30% ruling
On April 27 the Supreme Court of the Netherlands published a court case in which the 30% ruling was in question. The question was whether the 30% ruling is allowed for income from options which are received after the end of the actual employment period. This court case possibly opens a much broader scope of the 30% ruling than initially suggested
Please view our article published on August 10 about the 30% ruling update www.koppelservices.com/newsflash/expat/30-ruling-questioned/