Dutch Tax Blog

Dutch Tax Blog

Gifts and Dutch taxes

General Dutch (Tax) NewsPosted by Mike de Gruijl Fri, October 14, 2016 17:12:43


As known, gifts that you as an individual, donate to a charity or institution are deductible for income tax purposes. However, there is a threshold and a maximum. There is a way to bypassing this.

Gifts Deduction for individuals

Threshold. Donations to an ANBI (the charity institution) or a support foundation SBBI (Social interests looking after setting) are deductible from the income tax, provided the donations exceed a certain amount. The threshold at a rate of at least 1% of your threshold income, with a minimum of € 60, -. Pay attention. Other gifts are not deductible.

Maximum. In addition, a maximum of 10% of your threshold income. That threshold income is the total of all your income and deductions in Boxes 1, 2 and 3. The personal allowance (medical expenses, and the like) thereby remains disregarded. Pay attention. Do you have a fiscal partner, you must add up the threshold income of your partner with your own threshold income. You understand that you therefore it is not easy to the deduct small gifts in the income tax.

Suppose your threshold income is € 30,000, -. The threshold then will be already € 300, -. Only what is donated above this amount to the charity, is deductible.

regular donation

At least five years. Consider a periodic donation. With a regular donation you will agreed a fixed amount to the charity or institution (such a regular donation may also be an association with at least 25 members) that you annually donate (minimum five years), for example, € 75, -, providing that you are still alive during this period.

Deed. Where you used to consult a notary for such an agreement, it is now no longer necessary. You can arrange it in a private act.

No threshold. The advantage of such a periodic donation is that there is no more threshold in that case. So every euro donated is a tax credit! And if you already annually bestows such a relatively small amount of one or more charities, why then let slip that tax?

At a tax rate of 42% a donation of € 75, - will still give you an annual benefit of € 32,-.And perhaps you want to take this benefit in account with a the regular donation?

And gifts to the children?

Annual exemption. Annually, you may over € 5000, - pay tax on your children (2016: € 5304, -). This donation is not deductible for income tax purposes.

Repetitive donation. What if you make this donation in a way of such a regular gift? According to the Tax Administration it will be a recurring donation. The tax authorities will calculate the cash value of all agreed donations. The present value is so much higher than the exempt amount, making the multiple still owed gift tax. Be aware. Such a predetermined periodic donation is not suitable for gifts to children.





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