What do you need to be aware of when completing your 2023 tax return? A lot of people forget to check their pre-filled tax return carefully or add any missing information. They may then overlook certain deductions they could have made.
You may be able to use deductions when completing your 2023 tax return to lower the amount of income tax you will have to pay. Examples are deducting mortgage interest or the notary and mortgage advice fees for taking out the mortgage from your income. You may also deduct personal deductions, such as spousal and/or child maintenance, medical expenses and gifts and donations from your income, subject to certain conditions.
You may also be entitled to one or more tax credits , which will give you a discount on the calculated tax. Examples of tax credits are income-related combination tax credit (for parents with young children), (single) elderly person’s tax credit (for people who have reached the state pension age), and discounts on green investments.
If you made any donations (for which you have proof) to one or more public benefit organisations (known as ‘ANBIs’ in Dutch) in 2023, we advise you to make a list of these donations. If they meet certain conditions, donations are tax deductible. A distinction is made here between ‘one-off’ gifts and ‘recurring’ donations (a regular, ongoing donation). A threshold and a maximum apply when deducting one-off gifts. No threshold applies to recurring donations, but you do need to meet a number of conditions, including that the donation is laid down in an agreement.
If you make a donation to a cultural public benefit organisation, you may deduct 1.25 times the donation amount from your income, up to a maximum of €1,250. You will reach this maximum if you give at least €5,000 to cultural public benefit organisations in a calendar year.
Expenses incurred due to sickness or disability are deductible under certain conditions. You may only deduct the medical expenses in the tax return for the year in which you paid these expenses if they were not reimbursed. Expenses that fall under the voluntary or compulsory excess are non-deductible.
You can set off the personal deductions (such as donations, medical expenses and spousal maintenance) against your income in Box 1, Box 3 and Box 2 (in that order). If you cannot fully set off your personal deductions against this income, you may set off the remainder against your income in a future year. Regardless of your income, your medical expenses are deductible at a maximum rate of 36.93%, but the deduction of medical expenses is subject to a threshold amount that depends on your income and deductions.
If you borrowed money in 2023 from your company, a family member or another person to be able to buy your home, you must state this loan separately on your tax return. If you took out a loan from your own company in 2023 for your home, the condition is that a right of mortgage must be established in favour of the company.
Permanently or temporarily letting all or part of your home will affect your taxes. This is explained in more detail in the article (in Dutch) ‘Uw woning verhuren: hoe zit het juridisch en fiscaal?’ (Letting your home: what are the legal and tax implications?).
Box 3 of the tax return is where gains from savings and investments is taxed. In 2023, the general exemption in Box 3 (the tax-free allowance) is €57,000, while the exemption for partners for tax purposes jointly is double that amount, i.e. €114,000. You do not have to pay any income tax on amounts declared in Box 3 that stay below this threshold.
Despite the fact that the tax-free allowance has been increased to €57,000, taxpayers with Box 3 gains of €33,748 or more must include these in Box 3 on the tax return for 2023. The reason for this is that the Dutch government wants to prevent the increase in the tax-free allowance from affecting the means test in many means-tested (i.e. income related) schemes. If it were to have effect, more people than intended would qualify under a means-tested scheme or receive more/pay less under such a scheme. Special arrangements intended for low-income individuals/families include the healthcare allowance, the child budget, the childcare allowance, the personal contribution for the Long-term Care Act and more.
Remember that no tax debts can be deducted in Box 3. An exception is inheritance tax debt and, under certain conditions, tax debts from a provisional income tax assessment. This is explained in more detail (in Dutch) on the ‘Belastingschulden’ (Tax debts) page on the Dutch Tax and Customs Administration’s website.
• If you pay spousal maintenance to your ex-partner, the amount you pay is tax-deductible. Your ex-partner must declare the same amount as income on their income tax return. Child maintenance is not tax deductible, nor is it considered a form of deductible debt for the purpose of Box 3 either.
If you have moved out of your home on account of a divorce or separation in advance of a divorce, while your ex-partner continues to live there, you will be able to continue to use the mortgage interest deduction for your share of the ownership of the home for a maximum of 24 months after you move out. You must then also declare the imputed rental value for your share of the ownership over that same period. This is balanced out by a spousal maintenance deduction of the same amount. After all, you have granted your ex-partner the benefit of occupying the property.
Given that the death occurred in 2023, this means that at 00:00 on 1 January 2023 you did not have any inheritance tax debt relating to this death yet. You can include this debt in your 2024 income tax return, which you can file with the Dutch Tax and Customs Administration from March 2025 onwards.
If so, you can generally include the amount of this debt in Box 3 of the tax return, regardless of whether you have already received an inheritance tax assessment from the Tax and Customs Administration for this.
Relief for self-employed persons or new businesses, or SME profit exemptions? As a business owner, filing a tax return is a little bit different than for employees.
The information on our website about submitting your tax return applies to people who are liable for tax in the Netherlands . If you have not received an ‘aangiftebrief’ (notice of obligation to submit a tax return), or do not know whether you need to submit a tax return, check with the Tax and Customs Administration (Belastingdienst).
