If you are married or are in a registered partnership, legally you are also financially tied. However, there are other conditions that ties your tax position to someone else in the eyes of the Tax Authorities. In this article you can read under which conditions you are considered a tax partner, and what the consequences are for your tax declaration, expenses or reimbursement.
What is tax partnership?
Tax partnership is an arrangement where partners or cohabitants are attached financially. When you are a tax partner, this affects your allowances. Furthermore you and your tax partner can choose how the communal income and deductibles are divided.
When are you a tax partner?
If one of the situations below applies to you, then you are a tax partner:
- You are married;
- You have entered a registered partnership at a municipality.
You live together and:
- You have a child together;
- One of the partners has recognized the child of the other partner;
- You are the owner of a purchased home in which you reside together;
- You have designated your roommate as the entitled party of your partner pension;
- You have a notarial cohabitation agreement;
- A minor of one of the partners is registered at the same address.
When you do not meet even one of these conditions, you are not a tax partner.
Exceptions and additions
Do you not meet any of the conditions, but do you still want to enter a tax partnership with someone else? Then you can go to the notary to draft a cohabitation agreement, because this way you are considered tax partners in the eyes of the Tax Authorities.
Or the other way around: Do you meet the conditions, but do you not want to enter a fiscal partnership? This is possible if you are renting out to the (supposed) partner. In this case we can speak of renting on a commercial basis instead of a tax partnership. The rental agreement will need to be recorded in writing.
Are you and/or your partner not a resident of The Netherlands? Then additional rules apply. You can read more about that on the website of the Tax Authorities.
Beginning and ending tax partnership
A tax partnership starts at the moment you are registered on the same address, and you meet the conditions mentioned above. When you meet one of the conditions (for example because your partner recognizes your child, or you have a child together) and you were living together before that, then the fiscal partnership enters retroactively: Did you live together before the year in which you became parents (for example: you become parents in 2020, but have registered at the same address since 2015), then the partnership counts for the entire year (2020) for the purposes of your tax declaration. When you live together halfway through the year and meet the conditions at the end of the year, the partnership, retroactively, starts the moment you are registered at the same address. You can also choose to be tax partners for that entire year, even though you were only tax partners for a part of the year on paper. When you want to make use of this arrangement, you will need to mention this in your tax declaration.
A tax partnership ends at the moment you are no longer registered at the same address. This also applies to situations where you are still co-owners of that house. In the case of a divorce, the tax partnership, therefore, ends the moment one of the partners deregisters from the old home and registers at a new address.
Income and deductibles
When you are married or live together with someone, you often share the expenses of the household. When you are tax partners you can make agreements about how to divide the communal income and deductibles in your tax declarations. Read below about what expenses you can and cannot divide.
Income and deductibles you can divide
The following income and deductibles can be divided between you and your tax partner:
- The balance of the income and deductibles of your own residence;
- Deduction for the lack of or small mortgage;
- Benefits from significant stakes*;
- The joint basis for saving and investing (box 3);
- Paid alimony and other maintenance obligations;
- Expenses for specific healthcare
- Expenses for temporary accommodation for seriously handicapped children, brothers or sisters;
- Study expenses or other schooling expenses*;
- Remainder personal deduction for previous years.
Tax benefits through tax partnership
When you have been tax partners for an entire year, you can divide the communal income and deductibles for your tax declarations any way you want. Any sort of divide is allowed, as long as the total amounts to 100%. The way in which you divide your income and deductibles can affect the taxes and premiums that you pay or get back. Generally the rule applies that you will receive the biggest tax benefit by letting the partner with the highest income deduct the expenses.
As you can see, dividing the income and deductibles properly can be financially advantageous. It is therefore important to review what the best way is to submit both tax declarations. However, you cannot move around income entirely freely in this; the following incomes and deductibles cannot be divided between you and your fiscal partner:
- Profit from enterprise (including entrepreneurial deduction);
- Wages, allowances or pension;
- Travel expenses public transport;
- Additional income as a freelancer, home helper, artist or professional athlete;
- Received alimony or other periodic incomes
- Expenses for income supplements such as premiums or annuity;
- Negative expense for income supplements;
- Negative personal deductions;
- Income through assets made available;
- The joint basis for savings and investments in the year in which you have emigrated or immigrated and have not been tax partners for that entire year.
The balance of the income and deductibles of your own residence is €5.000. Your gross yearly salary is €80.000. This means that a large share of your income from work and residence fall under the highest tax rate of 52%. The gross yearly income of your fiscal partner is €14.000. This is taxed at the lowest rate. When you take the entirety of the amount yourself, the tax benefits are 52% of €5.000 (€2.600). When your tax partner would take the entirety of that amount, the tax benefits would only be 34.4% of €5.000 (€1.720). So allocating this amount to your tax declaration will save you €880 in taxes.
Would you like to know more?
The Consumer Association has developed a tool (in Dutch) with which you can easily determine whether you have a tax partner or not. You will find further information on dividing of deductibles of partners for the purpose of your tax declaration. Read more about this on belastingdienst.nl.