The Fiscal Partnership in the Netherlands

The Dutch taxation system is very complex; however, it provides for various incentives for companies and individuals registered as tax residents in the Netherlands. When it comes to the taxation of individuals, the box system applies.

Dutch citizens or residents have the possibility of becoming fiscal partners or tax allowance partners and thus benefit from several advantages offered by the tax authorities.

Below, our company formation agents in the Netherlands explain how a fiscal partnership can be created.

Who can become fiscal partners in the Netherlands?

It should be noted that married couples will automatically be fiscal partners in the Netherlands, however, there are also other categories of individuals who can enter fiscal partnerships. These are:

• -          unmarried couples living together;
• -          people living together as housemates.

However, these two categories must meet certain requirements in order to be considered fiscal partners.

Requirements in a Dutch fiscal partnership

In order to meet the Dutch fiscal partnership’s requirements, individuals must:

• -          be living together in accordance with a contract signed before a Dutch civil notary;
• -          have one or more children together, or at least one of the individual has children recognized by the other partner;
• -          the two persons have a joint pension fund or one of the individuals is designated as a partner in the fund;
• -          the individuals own a home jointly, or one of the partner’s children lives in that home;
• -          individuals who have opted for a fiscal partnership in the previous year can do so in the next year.

In the case of unrelated individuals, these must be registered at the same address with the municipalities.

Why enter a fiscal partnership in the Netherlands?

The advantage of the Dutch fiscal partnership is the deduction offered by the tax authorities which can be offered for several types of incomes. In order to benefit from this deduction, the partners will file a joint tax return where one of the partners will partially allocate a higher amount of money to pay the income tax. This will usually be the partner earning the most, as the deductions offered by the authorities will be higher.

For more information on how the fiscal partnership works, please contact us. We remind you that we are specialized in Dutch company formation, so we can also help you open a company here.