The taxes and tips to save

A rough calculation to your take home salary is as follows:
Note: Since Jan 2014, I have transferred this blog to http://indiansinnetherlands.com due to better features. So for latest (and correct) notes, kindly click here: http://indiansinnetherlands.com.

1. Know your annual gross.
2. If your employer is paying health insurance, add € 2,400 per adult in the family including you
3. If 30% ruling is applicable, multiply above value by 0.7. Else multiply by 1. This is the 'taxable wage'.
4. Multiply upto €55,500 of your 'taxable wage' by 0.58. 
5. Multiply anything exceeding €55,500 by 0.48.
6. Add values from 4 and 5. 
7. If 30% ruling applies to you, multiply 2 by 0.3 and add it to value from 6. Else add 0.
8. This is your very rough take home salary for the year. 
9. Note: Employer will also pay 1 month salary/year as holiday bonus. This is taxed at 52% flat.

A non-working spouse is eligible to get approx €160/- per month as tax-refund. You need to apply for it at a local tax office. Per my understanding, you must have lived in Netherlands for minimum 6 months to get this....not very sure about this rule.

30% ruling: A person employed directly from abroad may be eligible for '30% ruling'. If you are approved, your first 30% of the salary is completely tax free for the first 8 years of your stay in Netherlands. Income tax is calculated according to the tax-slab on 70% of your salary. For details on eligibility criteria, I found these website useful: http://www.taxpat.com/en/F.A.Q.-s/Questions-Regarding-the-30--Ruling--Netherlands-Tax-Benefit-#1 and http://www.expatax.nl/30ruling.php

Tax-free school fees: If you have 30% ruling and a school going child(ren), you can save some money. When filling the school-fee form at the beginning of the year, request for the school fees to be billed to your employer. Your employer will pay this invoice, but will deduct an equal amount from your gross. Since your gross reduces, you do not pay tax on the reduced amount. This will save you about 30% to 52% of the tuition fees depending on your tax bracket!!

Tax-free shopping: A a foreign resident/visitor can claim the VAT when leaving the EU for good. Ask for a tax-free form when doing your shopping. When leaving, at the airport show your purchases, tax-free forms and passport to customs officials and claim your refund! Found this link to have good information: http://www.taxfreeworldwide.com/lang-en/what-is-tax-free-shopping.html


Albert Heijn will most likely be your grocery shop of choice. They give free 'bonus card'. You will get a discount on some of the items in the store if you show this card at the checkout counter.

Tax refund (for first year): If you have moved to NL after January 1 you need to apply for tax refund at the end of the year. This is because irrespective of when you move to Netherlands, your employer will withhold tax from your salary as if you were earning for the full year.
Example: If you came to NL in 2012, at the beginning of 2013, your employer will send you an "annual statement" (called 'Jaaropgave') for the year 2012. After you receive this, call the tax-office. Explain them your situation and request them for a tax/return form. You will get a booklet via post. Though the form is in Dutch, an English version of the instructions manual is available on their website. Fill the form and send it.

Important points:

- if your 30% ruling is approved later in the year (or may be next year) you would have paid full tax without the 30% ruling benefit. So enclose a letter saying your 30% ruling has to be accounted when processing your tax return.

- the tax form will ask only your income declaration. Refund will be calculated by the tax-office

- do not mention your India income

Disclaimer: The is my best effort and no responsibility will be taken for any inaccuracy