Income Allocation Between Partners for Tilburg Residents
The allocation of partners' income offers residents of Tilburg a smart tax opportunity under Dutch family and tax law. Spouses or tax partners in the municipality of Tilburg can reallocate income from work, housing, and savings via their income tax return. This often lowers the overall tax burden, depending on your partnership status and marital property regime. In this article, we explain the rules, with examples and tips tailored to Tilburg households.
What is income allocation between partners?
With the allocation of income between partners, tax partners reattribute their box 1 income (work and housing) and box 3 assets (savings) for tax optimization purposes. This can mean better distribution across tax brackets or maximizing tax credits. It's particularly relevant for Tilburg residents who own a home in the city or have dual incomes. See also our article on marriage and taxes.
In a marriage or registered partnership, you are automatically considered tax partners. Cohabiting couples in Tilburg must meet strict criteria; otherwise, incomes remain separate, and you may miss out on tax benefits.
Legal basis
The rules are set out in the Income Tax Act 2001:
- Article 2.1 Income Tax Act 2001: Definition of tax partnership.
- Articles 2.13 and 2.14: Reallocation of box 1 income.
- Article 2.36: Allocation of deductions.
- Article 3.111: Allocation of box 3 assets.
Overview of allocation mechanisms
Tax partners in Tilburg can select the most advantageous mechanism. Here's a table:
| Mechanism | Description | Conditions | Benefit for Tilburg Residents |
|---|---|---|---|
| Box 1 allocation | 50/50 split or adjusted attribution of work and housing income. | Both have income. | Optimize tax brackets and claim credits. |
| Attribution of benefits | Shift alimony for tax purposes. | Periodic payments for maintenance. | Deductible for payer, taxable for recipient. |
| Gift allocation | Equalize gifts. | No exclusionary marital conditions. | Reduce gift tax. |
| Box 3 allocation | Redistribute assets as of January 1. | Tax partnership. | Halve the levy in case of imbalance. |
Conditions for tax partnership
You must qualify as a tax partner to allocate:
- Automatic: Marriage or registered partnership.
- Cohabiting in Tilburg: Meet requirements such as:
- Living at the same address in the Municipality of Tilburg for at least 6 months.
- A dependent child or joint mortgage.
- Notarial deed establishing joint liability.
Practical examples for Tilburg
Example 1: Box 1 allocation
Partner A (€60,000 from work in Tilburg), B (€20,000). Without allocation, A falls into the higher bracket (37.07%). With a 50/50 split (€40,000 each), save €500, plus tax credits for B.
Example 2: Alimony
Ex-partner pays €12,000. Deductible for the payer and taxable for the recipient – key in Tilburg divorces.
Example 3: Box 3
A has €200,000 in savings, B has €0. Allocation halves the 1.2% levy.
Rights and obligations
Rights:
- Choose the most favorable allocation when filing.
- Access via the Tax Authority app.
- Objection procedure: Hearing and appeal to the District Court of Zeeland-West-Brabant (Breda location).
Obligations:
- File a joint return (unless opting out).
- Provide accurate information; fines up to 100% for fraud.
- Marital conditions may impose limits.
Frequently asked questions
Am I a tax partner with my Tilburg partner?
Yes, if you meet the qualifying criteria: cohabitation, child, or shared finances. Use the Tax Authority tool or Tilburg Legal Aid Office.
Can allocation change after filing?
No, it's binding for the year. Supplementary returns possible up to 5 years, but with risk of additional assessment.
Does it apply to registered partnerships?
Yes, treated the same as marriage. More info.
Partner living abroad?
No tax partnership, unless both are subject to Dutch tax. Check the treaty.
Tips for Tilburg residents
- Plan smart: Use the Tax Authority's calculator for optimal allocation.
- Marital conditions: Opt for limited community property for flexibility. Read more.
- Divorce: Get free advice from the Tilburg Legal Aid Office on tax implications.
- Local support: Contact the Municipality of Tilburg or Legal Aid Office for personalized guidance.