The amount of the double tax relief cannot be more than the payable income tax in the relevant box. This could mean that certain deductible items, such as the mortgage interest connected with your owner-occupied home, will not result in a tax advantage. For these types of situations, there is the roll-over scheme. By means of a decision, we determine the amount of foreign income which is automatically included in the calculation of the relief in a following year. You may not include this transferred amount once again in your tax return in that year.
The roll-over scheme is applied to each box. Therefore, it is possible that you will receive a decision for income in box 1 and another decision for income in box 3.
Example of how the roll-over scheme works in box 1
Calculation of the double tax relief in box 1: your taxable income from work and home (box 1) is € 22,690. In 2010, you owe income tax on this amounting to € 944.
Your income consists of income from employment in Germany amounting to € 27,226 and negative income from your owner-occupied home amounting to € 4,536. You will owe tax in Germany on the German income from employment and will be entitled to double tax relief in the Netherlands. The double tax relief amounts to € 27,226/€ 22,690 x € 944 = € 944, as the maximum amount of the relief is € 944.
In this example, the negative income from your owner-occupied home does not lead to a tax advantage. That is why this amount (€ 4,536) is reserved. Should you have income in box 1 in the future on which you have to pay income tax in the Netherlands, a double tax relief will still be given on the reserved amount and you will receive a tax refund. This is called the roll-over scheme or foreign pre-incorporation profit scheme.
The tax treaties do not include any rules on the levy of national insurance contributions. Other (international) rules apply to this.
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