Preliminary Tax Refund (Voorlopige Teruggave)

The key points at a glance

It is often possible to get money back from the tax authority through deductible items. The amount you have overpaid in tax is normally paid out once a year. However, you can also receive an advance on this refund, which is called a voorlopige teruggave (preliminary tax refund).

1. What is a tax refund?

The refund means you can get overpaid tax back directly when your salary is paid out. Sometimes you don't even need to pay the tax at all, thanks to a discount you receive.

The voorlopige teruggave generally doesn't result in money being deposited into your account; it usually means you pay less tax. In particular, if you own a home, there is a good chance you can use the voorlopige teruggave to pay less tax.

2. Advance on your tax refund

In the Netherlands we pay tax on our income, and any deductible items can reduce that amount. At the end of the year we have to file an income tax return, in which we can declare deductible items, among other things. Without an advance, this would mean paying full tax every month and then getting part of it back after a year.

Thanks to the mortgage interest deduction, many people can make use of the voorlopige teruggave. A kind of offsetting takes place.

3. Mortgage interest deduction and the preliminary tax refund

In particular, the mortgage interest deduction means that many people can take advantage of the voorlopige teruggave.

Example

Say you pay €800 in tax per month based on your gross income. On the other hand, you have a mortgage on which you pay €600 in interest. Based on 42% income tax, this results in a mortgage interest deduction of €252. You can offset that €252 against the €800 in tax, leaving a net tax of €548 per month.

This way, you effectively pay the net costs of your mortgage. Want to see how the mortgage interest deduction lowers your net monthly costs? Calculate it here. You can also deduct all the costs you make to arrange the mortgage from your taxes. Think of advisory and brokerage fees, NHG costs, valuation costs and notary fees for the mortgage deed, in other words the purchase costs.

4. Other deductible costs

Besides the mortgage interest deduction, there are other deductible costs that may apply. These can affect the amount of your preliminary tax refund. Examples include alimony payments or commuting costs. It is sensible to carefully estimate your various deductible items and work out what your voorlopige teruggave will look like. This way you avoid paying too much tax. On the other hand, be careful not to claim a voorlopige teruggave that is too high, as this can result in having to pay additional tax later.

Frequently asked questions

What is a voorlopige teruggave?

A voorlopige teruggave is an advance on the amount you have overpaid to the tax authority.

When do I receive a voorlopige teruggave?

You normally receive your tax refund once a year, but with the voorlopige teruggave you can sometimes get a discount on your tax right away so you immediately pay less.

When am I entitled to a voorlopige teruggave?

When you overpay tax because you are making use of certain deductible items.

What can I deduct from my taxes?

There are many different deductible items, such as mortgage interest deduction, valuation costs, NHG costs, and sometimes alimony payments or commuting costs are also deductible.

Is there a risk associated with the voorlopige teruggave?

If you overestimate your deductible items, you may claim too large a tax refund. If that happens, you will have to pay additional tax later. This is therefore a risk when requesting the voorlopige teruggave.