Tax Partners in the Netherlands: How to Save Money Together

Living together, married, registered partnership. It matters not just for your relationship but also for your wallet. If you are tax partners (fiscaal partners) in the Netherlands, you can allocate certain income and deductions between the two of you. Done right, this can save you a significant amount on your tax bill.

When are you tax partners?

You are automatically tax partners if you meet one of these conditions:

• You are married or in a registered partnership
• You live together, are registered at the same address, and have a notarial cohabitation agreement
• You have a child together
• You are each other’s pension partner
• You jointly own a home

Living together without a contract and without a shared child? Then you are not tax partners, even if you have been together for ten years.

What can you allocate?

• Income from owner-occupied home (box 1): the deemed rental value and mortgage interest deduction
• Income from substantial interest (box 2): dividends from your own BV
• Income from savings and investments (box 3): assets above the exemption threshold
• Personal deductions: charitable gifts, medical expenses, alimony

Note: your employment income and business profit (box 1) cannot be allocated. Those belong to whoever actually earned them.

How does optimal allocation work?

Say you earn 70,000 euros and your partner earns 25,000 euros. You have 80,000 euros in savings together. By allocating all savings to the lower-earning partner, you pay less box 3 tax because they have unused tax credits and a lower marginal rate.

The same applies to mortgage interest. The deduction has more impact for the partner in the higher tax bracket. So assign the mortgage interest to whoever earns more.

Watch out for

• Benefits (toeslagen): as tax partners, your combined income counts for benefits. You might lose your healthcare or housing allowance.
• Box 3 debts: debts above 3,700 euros per person can also be allocated. Do not forget them.

Curious how much you could save with smart allocation? At MOJKA Finance, we run the numbers and make sure your return is optimally filed. As your expat accountant in Rotterdam, MOJKA Finance is here to help – view our services or schedule a consultation.