Consequences of tax partnership
Are you tax partners? If so, then you may divide certain income and deductible items in your tax returns as you wish. You may make any division you wish, as long as the total adds up to 100%. The partner with the highest income can, for example, deduct the expenditure. This offers you the greatest tax advantage. However, in some situations you do not have a tax advantage, but also no disadvantage.
You may choose a different division for every question on income and deductible items. The way in which you divide the income and deductible items may have an influence on the tax and contributions you must pay or are refunded.
Your deductible expenditure on your owner-occupied property is € 5,000. Your gross annual salary is € 60,000. A large portion of your income from employment and home ownership falls in the highest tax bracket of 52%. Your tax partner's gross annual salary is € 14,000. This falls in the lowest tax bracket of 33.45%. When you apportion the entire amount to yourself, then the tax advantage is 52% of € 5,000 = € 2,600. When you apportion the entire amount to your tax partner, then the tax advantage is 33.45% of € 5,000= € 1,673.
Tax partnership is also of importance when you have little or no income, since you may then be entitled to refunds of tax credits. However, this is subject to a number of conditions. For example, you must have had the same tax partner for longer than 6 months and your tax partner must pay sufficient (Dutch) tax.