Domestic taxpayers

Unilateral scheme

Until 2011, there was only a scheme for the prevention of double taxation in the relationship between Norway and the Netherlands, the Netherlands Antilles, and Aruba. As of 1 January 2011, you can invoke the so-called ‘unilateral’ scheme as a domestic taxpayer.

This new scheme arranges the prevention of double taxation for income from countries with which no treaty has been concluded to prevent double taxation. This scheme is called the ‘BES Decree on the Prevention of Double Taxation’. The application of this Decree also leads to the prevention of double taxation. For more information about preventing double taxation, you can contact Belastingdienst Caribisch Nederland.

Which income is covered by income tax?

There are three sources of income for income tax purposes:

• intangible capital (such as: interest and dividend, but also income from a so-called significant interest);
• company and labour (such as: profit from a sole proprietorship or company, income from other work, and from an employment relationship);
• rights to periodic benefits (such as annuity payments).

Only proceeds derived from one of these sources will be subject to income tax. Other income is not subject to income tax. You will not owe income tax on an inheritance or on lottery winnings, for example. This ‘income’ is not part of the above list. As a rule, minor income from work in a family setting is also not subject to taxes.

Immovable property

Income from immovable property (not including the own home serving as the main residence and the immovable property part of the company assets of a sole proprietorship) is not subject to income tax.

Deductible costs

Only ‘pure’ income from a source is subject to taxes. This means that deductible costs can be considered. Important in this respect is that these deductible costs per source (except in case of proceeds from a company or profession) cannot lead to a negative amount. The deductible costs per year cannot exceed the income for this source. If the costs in a given year are higher than the income, the excess may be settled with the proceeds from this source in the subsequent five years.

Besides the option of deducting costs for the various sources of income, personal obligations and extraordinary expenses can also be deducted. These include, for example:

• the deduction of interest on loans entered into for the financing and maintenance of and improvements to your own home serving as your main residence, including the costs of a life insurance which costs decrease during its effective period, and – up to a certain amount – maintenance costs;
• costs related to illness, incapacity;
• study costs of yourself or studying children.