If you’re bringing your inheritance into the Netherlands, tax laws may have implications for your assets, so make sure that you’re fully informed. With the right information at hand, you can avoid being hit by any unexpected taxes and duties that will stop you making the most of your inheritance.We’ve put together an overview of some of the factors that you may need to take into account when bringing your inherited wealth and assets into the Netherlands.
Dutch Taxes For Gifts And Inheritance
Both inheritance and gift tax exist in the Netherlands, and one or both may apply to you. If you have any material or financial inheritance that you wish to bring into the Netherlands, the tax authorities may require you to pay inheritance tax. Additionally, if you are bringing inherited goods into the country, you could be liable for import duties. Inheritance that has been classed as a gift may also occur similar taxes to insurance.
Inheritance is usually taxed by the country of the deceased. If you receive an inheritance from outside the Netherlands, you will pay taxes abroad. However, if you have inherited assets from someone with Dutch nationality, you may be liable for Dutch inheritance tax. So far, so simple – but bear in mind that Dutch citizens who reside abroad may be still considered residents for tax purposes up to 10 years after their departure from the Netherlands.
If you do have to pay inheritance tax in the Netherlands, you will pay a different rate depending on your relationship to the deceased, and a portion of your inheritance may even be received tax-free. The tax rates for 2017 were:
Spouses, registered partners and children:
– 10% (for amounts up to €122,268)
– 20% (for amounts over €122,269)
Grandchildren and other descendants:
– 18% (for amounts up to € 122,268)
– 36% (for amounts over € 122,269)
Siblings and parents, other blood relatives, unrelated heirs:
– 30% (for amounts up to € 122,268)
– 40% (for amounts over € 122,269)
There are several exemptions, which are outlined below.
– Spouses and registered partners: No inheritance tax up to €638,089
– Children and grandchildren: No inheritance tax up to €20,209
– Parents: No inheritance tax up to €47,859
– Handicapped children: No inheritance tax up to €60,621
– Other heirs, including siblings: No inheritance tax up to €2,129
If you inherit assets abroad but plan to live in the Netherlands, you may be liable for both Dutch and international tax on your inheritance.
Tax treaties exist between the Netherlands and more than 80 other countries, meaning that expats can avoid paying income tax both in the Netherlands and in the country of the deceased. However, only a handful of these countries have treaties to prevent double taxation on inheritance.
Therefore, be aware that you may be liable for taxation on the same assets by more than one country. You may be taxed by your country of residence or nationality, the country where the inheritance is located, or the country where the deceased resided.
Importing Inherited Goods
If you’re hoping to bring any inherited goods into the Netherlands, you’ll have to apply for an exemption on import duties. You can do this by filing a customs declaration, indicating your desire to import inherited goods without paying these duties.
Unless you have a lot of experience importing and exporting, it would be best to file the declaration through your removal company, using customs’ AGS declaration system. The company will use a special code to declare your goods, which grants you an exemption.
When claiming an exemption from import duties, you need to submit a number of documents to your removal company. These are listed on the Dutch tax and customs administration website.
Filing A Tax Return
When you receive an inheritance, you will usually pay tax on it by filing an inheritance tax return in the country of the deceased – so if your loved one died in Canada, that’s where you’d file your return. Note that inheritance tax returns and personal income tax returns are not the same thing.
If the deceased is a Dutch resident (for tax purposes), then you or the executor of the will must file an inheritance tax return with the Dutch tax office no later than eight months after the death. To avoid paying interest on your inheritance tax, your tax return should be submitted within four months.
If you’ve inherited assets located outside of the Netherlands (such as property) you will have to report the value of the land on your personal Dutch tax return. But don’t worry – to avoid double taxation, you can claim an exemption for the full amount on the same tax return.
Gift Or Inheritance?
If your inherited financial or material wealth is considered a ‘gift’ for tax purposes, you might still be taxed in the same way as you would for inheritance. There are a range of exemptions here too, which consider your relationship with the gift-giver, the size of the gift, and its purpose. Have a look at the official gift tax info or get in contact with the tax office for further clarification.
The tax system in the Netherlands is notoriously complex. To be able to enjoy your inheritance, without any nasty surprises, it’s important to understand a bit about Dutch inheritance law and how it applies to you.
If you’re feeling unsure about the effect of Dutch inheritance and tax laws on your assets you might want seek advice from a tax expert who provides services in English (such as Blue Umbrella) to ensure that you have the right information for your situation.
Are you an expat who has brought inheritance into the Netherlands before? What do you have to share from your experience?