Mr. Roel Kolder tax lawyer 02-03-2011 APROVE/AMC

Income taxes 2010 for PhD students

The speaker of the dayMr. Roel Kolder, tax lawyer. Has been working for the

last 29 years at PwC, as a VAT(BTW) specialist. He is the father of two daughters (PhD-student, Psychologist) who he has helped for years with their income taxes and has therefore become an expert in this field.

Income taxes

Income taxesThe Dutch Tax Administration goes back (by law ) for 5

yearsTherefore save everything yourself for 5 years!And not just only on an external hard driveIncome taxes are withheld from your monthly paycheckIncome taxes is determined based on your total income of

that yearTherefore, if you’ve worked for 6 months then too much

income taxes is withheld from your paycheck.All employers count!

Case: A PhD-student who directly starts working after receiving a Master’s degree1-10-07 started a PhD study.Totally withheld income taxes over 2007 was € 1.400 Subsequently filed for tax returns over the year 2009The tax return was done before april 1st 2008The total amount of € 1.400 euro’s was transfered (with

interest) in June 2008

Tax return programGo to www.belastingdienst.nlDownload the tax return program for the right yearFind your DigiD code of request a DigiD code at

www.DigiD.nlDigiD is your digital signature with the Dutch

governmentKeep all your receipts next to your PC!In case of doubts you can fill in your tax return in the

program but wait with sending it.

Tax returnYou file your tax return from the previous year. In 2011 you file your tax return from 2010.New services: the online return form is partially filled in

based on your previous tax return.In 2010 it didn’t work properly, it was available very

late and not a lot of information was filled in. The experience in 2011?Check if the correct information has been used.

Tax returnIf you haven’t done your tax return in the past you can

still do it for those years. To do so, you need your old annual paycheck

statements from your (former) employers.If you had holiday jobs during university, they might

have deducted too much taxes from your paycheck and you can ask for your money back.

The government usually gives this back, but it’s not enforceable.

Old tax returns (1)Focus on health care costs Additional health insurance was deductableHome pharmacy was deductable

A person with glasses has a chronic illness and costs were deductable

Also the cost of the glasses itself were deductableSpecials diets were deductable, etc.In the tax returns programs supplementary information

boxes are available

Old tax returns (2)However, sometimes it is not clear whether something

is deductable or not

Tip :Check it on the Belastingdienst-websiteCheck it in the “Belastingalmanak” from that yearAnd if possible, in the tax return program explain why

you believe it should be tax deductableThe tax return is then filed correctly and corrections are

possible.

Educational costs (2010)Certain things are deductable above a certain thresholdThe threshold for 2010 was € 500 per person

Who has bought that new PC???Look at it in all fairness and reasonIf your employer compensated you for it, you can’t deduct it

from your taxes! No hobby studies!Plan your educational costs!Buy a new PC in January instead of December if you can’t

declare it in December.

Educational costsEducational books, literatureTuitionMembership of a faculty association50% of your home internet subscription. The rest is

private.Write off expensive educational books.Not the costs for decorating your working roomNo costs for food and drinksNo travel and housing expenses

Case: The PC (1)Buying a good PC that will only be used for your

education/PhD studies. After all, your old PC is just for emailing!Remaining value is 10 %Costs can be divided over 3 yearsPaper and ink can be educational costs, but you use in

the year that you bought it.

Case: The PC (2)You bought the PC for € 599,- TFT screen € 250,-Printer € 130,-Keyboard and mouse (wireless) € 100,-In total € 1079 remaining value = 10 % Yearly deductable: € 323,70(threshold 2010 is € 500,-)

(€1079- €107,90=971,10 divided by 3)

In conclusion: you are better off buying that MacBook Air €1700-170/3= € 510 That puts you over the threshold!

Travel expensesEmployers usually make a financiel contribution to the

work-travel expenses of their employees. This will be deducted from your travel expense that you can declare.

You have to travel at least 10 km.1 day or more, for at least 40 days a year.Keep public transport receipts/declarations of costsUsually there is nothing left to declare.Just fill it in and the system tells you if your getting

anything back.

Promotion costsPrinting/shipping your booklet

including telephone costs/shipping, etc.

If the copy number is higher than the minimal requirement of the university then the additional costs are not tax deductable!!!

Promotion costsIf the price proposal from the printer for the first 50

copies that the AMC demands are let’s say € 2.000And you order 250 extra for only € 500Then the tax services could say that only 50/300 X

€ 2.500 = € 416,66 is tax deductableIf there is a separate bill for the additional 250 copies

then the amount of € 2.000 is completely tax deductable!

In short, make good arrangements with your printer!

Promotion costsCosts for renting the proper clothing, also for both

paranymphsCosts of the receptionSometimes you can get a contribution from your

employer/sponsor!Not deductable are the costs of the promotion dinnerNot deductable are the costs of the photographerFor more tips also look at:www.promotiewijzer.nl/financien/belastingen

DonationThe financial donation parents can give their children

(18-35 years) yearly, free from donation-taxes, is a maximum of € 5030 for 2010

One higher donation is possible but many conditions apply to this and need to go through a notary. For 2010 this is € 24.144 or up till € 50.300 for purchasing a home, education or proffesional.

Be carefull to read all the conditions!

DonationWhy a donation instead of parents paying for some

promotion costs? Parents can’t declare any of these costs but the PhD-

student can.

Being stationed abroadOften alot of double costsEmployer could pay for the (extra-territorial) costs

which is charged for taxes (See almanak 45.4.10)Renting out your appartment temporarily could be

benifical, there are 11 tax possibilities (See almanak 5.20.1)

Look closely at your insurances and your health care insurance in particular!

Buying your own houseTip: do not buy a house in Amsterdam but on the

country side in North-East GroningenGood real-estate agent in a good market, fee usually is

around 1.5 % of the purchasing price.If a house is on the market for a while a lower fee

might me negotiated! (€ 995-€ 1.500)In Amsterdam a purchase contract has to go through a

notary.Perhaps in the future this will no longer be the case.

Buying your own houseFind a affordable notary for the transport act and

mortgage act. Lot’s of family who like wall-paper and painting etc. External contractor, only 6 % VAT on labor costs. If you need a lot of construction material, buy them

ahead of time when they are on sale in the home improvement stores (20 %/15 %).

Buying your own houseWith the “kosten koper (KK) ” (cost buyer) count on about

10% additional costsWith the “vrij op naam (VON) ” (free on name) you pay for

the mortgage certificate and various provision costs, so in practice the costs are still rather high

Make a budget ahead of timeTake setbacks into account

Buying your own houseWith an old house have the construction checked by an

engineer. (Watch the CV!)Costs around € 300 At the VVE (Union of Owners) ask for the annual

account to check if there are sufficient funds.If there is a housing corporation in the VVE it’s usually a

sign the finances are in order.Watch out for the individual ground lease!

Buying your own houseIs NHG warranty recommended? Costs are deductableCosts of the taxation rapport are deductableCosts of the mortgage certificate and land registry are

deductablen Not deductable are the costs of the transport

certificate!Not deductable are the costs of the real estate agent!In the appendix of the handout sheets there is a list of

deductables according to the goverment.

Buying your own houseCosts fee real estate brokerage are deductableCosts for fee of preparation and elongation fee are

deductable Costs bail-bonding provisionare deductable (yearly)The costs of the monthly paid interestDownside is the own housing forfait! In politics the deduction of the mortgage-interest is

being discussed!

Buying your own houseSpecial rules for monumental housesDeductable are the monthly or yearly paid contributions

to ground lease. When you choose for a savings mortgage the saving

amounts are not deductableThe contractual savings are taxfree (gross is net)!So if your not planning of buying a house or getting

married soon think about getting contractual savings (spaarloon).

Buying your own houseBiggest problem 2011 is securing financing from a bank.A donation from parents (€ 50.300) could be a solution.When borrowing money from (grand)parents, they should get a

second mortgage for the amount.

Exp. Purchasing a house € 200.000(VON), bank will only fundyou € 150.000, grandparents want to help with the rest sum.At a forced sale of the house it sells for € 175.000, The

grandparents only get € 25.000This form of financing is risky for (grand)parents when a house

isn’t worth enough.

Provisional tax returnsIn buying the house you are faced with high costs which

are for a part tax deductableA tip is to hand in a provisional tax return on the day of

transport of the house. Personal experience: a return sent in on december 2nd

2009 and money was transferred on december 28th 2009

Living together and taxesWhen living together with your partner and he/she

hardly has any income it can be good to do a joint tax return.

Tip find another partner!Are the taxes going to pay € 167,- each month?Just try it!The rules have changed again for this year!

The first childThe costs according to the CBS 19 % of the net income

in total €100.000/€ 150.000Child benefits € 194,99 per 3-monthsChild benefits depends on the combined income and

number of children.Look at www.nibud.nlVery often the employer will also pay for part of the

costs.

The first childThe cheapest child day care people are the

grandparents!If the parents are divorced, daycare for 7 days in the

week is good and arranged quite cheap!

Averaging the income over 3 yearsThreshold €545Taxable income from box 1Taxes without tax creditIB tarifs see website www.belastingdienst.nlApply for averaging 6 weeks after receiving a final

decision on your taxes. This usually arrives in october.Case: following in the next slides

Averaging2007 € 6.179/ € 2.0782008 € 24.811/ € 8.9312009 € 30.018/ € 11.087----------------------------------------Total € 61.008/ € 22.096

Averaging

AveragingAverage income and owed taxes.See excel file on. www.aprove.nl ( € NUL) or www.belastingmiddeling.nl (€ 14.50)

Total € 22.096Owed € 21.158To much paid € 938 min threshold of € 545€ 393 paid back by the goverment.

AveragingBeware of the pitfall!

The first € 17.319 is against 33,65 % taxes and the amount over that and the rest against 41,4 % of even 52 %.

Not for foreign taxpayers.