What deductions am I entitled to for having a partner and child living outside the Neterlands?
It is not uncommon that one of the partners decides to go to the Netherlands for work, while the other - often a woman - stays in home country. If such a person meets the conditions according to which the Belastingdienst (the Dutch equivalent of the Tax Office) is perceived as your partner fiscal, it is possible to settle income tax jointly and take advantage of {additional) reliefs. And if you have a child living outside the Netherlands, you may also be entitled to relief on this account!
Since the Dutch income tax rates are among the highest in Europe, it pays to explore the possibilities of the local tax system and keep most of the money you earn in your own pocket!
In our article you will read:
1. What is the so-called "separation", who is entitled to it and what conditions must be met to receive it,
2. When are you eligible for child tax relief?
1. What is the so-called "separation", who is entitled to it and what conditions must be met to receive it?
One of the additions that so far has often been used by compatriots working in the Netherlands is the tax relief for a fiscal partner with low or no income. Colloquially called by them "separation", in fact it has little to do with separation: it also belonged to people living under one roof. In the Netherlands, he has the slightly contemptuous nickname "aanrechtsubsidie", which means an accessory for standing by the kitchen! Since 2009, in order to encourage women to participate more in the labor market, the amount of this allowance was gradually reduced, and from 2023 it will no longer be paid to persons born after 1962. And this is unfortunately bad news for employees in the Netherlands.
However, if you worked in the Kingdom of the Netherlands in previous years, and you had a fiscal partner living abroad in the Netherlands during this period, you can apply for this allowance up to 5 years back!
The conditions that must be met for this purpose are:
• you are fiscal partners according to the Belastingdienst,
• at least 90% of your joint income comes from working in the Netherlands. What counts is the total joint income, and therefore also your income from work in Poland. The income of the partner working in the Netherlands should be higher than €10,000 gross, and the income of the partner living outside the Netherlands should be lower than €6,000 gross,
• both partners must have a BSN number. When working in the Netherlands, you cannot do without it, and if your partner does not have it yet, you must submit an appropriate application for this purpose.
2. When is child relief available?
According to Dutch tax regulations, the child does not have to live in the Netherlands in order to benefit from the child allowance ("inkomensafhankelijke combinatiekorting"). Moreover, this relief is available not only for one's own child, but also, for example, for an adopted child, stepchild or stepson.
However, you should remember to meet several conditions, namely:
• living together with the child for at least 6 months in a calendar year and maintaining the household of which the child is a part,
• the child must not be more than 12 years old as of January 1, 2023,
• Your annual income must be higher than €5,548.
It is worth noting that, unfortunately, this relief will also be abolished from 2025.
Summary
The Dutch tax system is quite complex and constantly changing. In order to make the most of the opportunities offered by reliefs and allowances, you need in-depth knowledge of the regulations - which is difficult and not always feasible when we do not work in the financial industry ourselves. Therefore, if in doubt, it is worth seeking help from professionals. Our experienced experts provide advice and will help you settle Dutch tax with the greatest possible benefit for your wallet. Call us, contact us by e-mail or leave your contact details and we will call you. Paying taxes will never be pleasant, but with us it will become much easier - and more beneficial for you!