Tax reliefs in the Netherlands: Some of the most useful tax reliefs in Netherlands that could save you money.
There are a number of tax reliefs in the Netherlands which could save you money. The most common reliefs are the income tax deduction for home mortgage interest payments, the 30% ruling, and the tax-free childcare allowance.
The income tax deduction for home mortgage interest payments is available to all taxpayers who have a mortgage on their principal residence. The deduction can be claimed for up to €100,000 of interest payments each year.
The Netherlands has a large number of tax reliefs available. While this can make it somewhat confusing to know which ones you qualify for, there are some very useful tax reliefs that could save you a lot of money. In this blog post, we will take a look at some of the most commonly used tax reliefs in the Netherlands.
The 30% tax ruling in the Netherlands
The 30% ruling in the Netherlands is a tax benefit for employees who are transferred to the Netherlands. The ruling allows employees to receive a tax-free allowance of 30% of their salary. This allowance is meant to cover any additional costs that are related to the employee’s move to the Netherlands.
The 30% ruling has been in effect in the Netherlands since 1990. It was introduced as a way to attract foreign employees to the country. The ruling is available to employees who meet certain criteria, including:
- You must be transferred to the Netherlands by your employer.
- You must work in the Netherlands for at least 16 hours per week.
- You must have a valid employment contract with your employer.
Renting a home tax reliefs in the Netherlands
The Netherlands has a number of tax reliefs available for people who rent out their homes. These tax breaks can be quite valuable, so it’s important to understand them if you’re renting out a property in the Netherlands.
The most important relief is the rent allowance, which can reduce your taxable income by up to €7,120 per year. You can also claim relief on your mortgage interest payments, and there are a few other minor reliefs available as well.
Make sure you understand all of the available tax breaks if you’re renting out a home in the Netherlands!
The most important one is the rent tax break, which is a tax deduction that you can claim on the rent that you pay each month. To be eligible for the rent tax break, you must meet the following criteria:
- You must be renting a home in the Netherlands
- The rent must be your only source of income
- You must not own any property in the Netherlands or anywhere else in the world
- You must not have received any other housing-related benefits from the Dutch government
The Netherlands Tax-free allowances for children and partners
The Netherlands has a number of tax-free allowances for children and partners. As a sample, you could see below some of the allowance tax-free amounts:
- Partner allowance €4,821
- Children’s allowance is €2,393 per child
- Education allowance of €5,000 per child
- There is also a partner allowance for civil partners. This allowance is €4,821 for the 2018 tax year
Pension contributions in the Netherlands
The Dutch pension system is one of the most complexes in the world. This is a result of the many different types of pensions that are available, as well as the range of contributions that employees and employers are required to make.
The Netherlands has a unique pension system that is partly funded by the government and partly funded by the employee. The government pays a percentage of the pension, and the employee pays the rest. This system is known as the AOW system.
The AOW system is financed by a number of different sources. The largest source is income tax, which contributes about 60% of the total cost. Social security contributions and premiums make up about 20%, and the remaining 20% comes from other taxes and contributions.
To wrap things up
The Netherlands is known for its favourable tax rates, and there are a number of tax reliefs in the Netherlands available that can reduce your tax bill. In this article, we take a look at some of the most useful tax reliefs in the Netherlands. To find out more, follow our Dutch section of the website for regular updates.
If you found this article helpful, please go to the rest of the website for more about accounting in Netherlands, the general accounting standards, some of the tax reliefs in the Netherlands, audit requirements, an overview of Financial Reporting, understanding the Netherlands tax system, or more accounting and financial topics in International Accounting, Audit, Taxation, Accounting Software, Cloud Accounting and Accounting Automation.
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