The article below discusses various types of sources of funds specific to the region, along with the local documentation needed.
- Freelancers
- Income from retirement
- Inheritance
- Gift and donations
- Allowance from close family members
- Loans
- Sale of real estate
- Rental income from real estate
Freelancers
Freelancers (referred to as ZZP'ers in NL) may not receive regular income, which can pose a risk due to the potentially short-term nature of their earnings. To address this, we require freelancers to submit tax declarations. These documents provide crucial information about their income and financial stability. Therefore, for freelancers operating in the Netherlands, most recent and finalized tax statements can be requested instead of invoices.
Income from retirement
On the Dutch tax declaration document (IB aangifte), you can find detailed information about pensions. Therefore, this document may be sufficient to understand if the income comes from a pension provider or a private pension plan and assess the SOF accordingly. The document must be a finalized version.
Inheritance
When you inherit assets in the Netherlands, you are required to declare this inheritance to the tax authorities by filing an inheritance tax return (Aangifte erfbelasting). The inheritance tax return must be filed within eight months after the date of death. The filed inheritance tax return (aangifte erfbelasting) with proof of submission to the tax authority needs to be obtained from the client.
Gift and donations
In the Netherlands, gifts/donations may be subject to gift tax, but there are also opportunities for tax deductions depending on the type of donation and the recipient. The tax rate is influenced by the relationship between the donor and the recipient and the nature of the donation. Details about the gift, its value and relationship are included in the gift tax return, which must be filed within two months after the end of the calendar year in which the gift was received.
To confirm that recipient has fulfilled this tax obligation, we may obtain the finalized gift tax return (Aangifte schenkbelasting).
It is therefore advisable to investigate the relationship between grantor and grantee and gain an understanding of how the grantor acquired their SOW (documentary evidence not needed).
Allowance from close family members
Family members in NL are only allowed to give monthly allowances to support the recipient's living expenses. This is only possible in the Netherlands when the funds are needed for living expenses, not for investments. If someone uses these funds for investments, they also have sufficient means to support themselves.
If a different scenario is encounter, please refer to section Gift/Donations.
Loans
A loan between a first-degree family or an employee and the client is acceptable in NL. However, a loan from a non-licensed entity to the client cannot be accepted. The funds cannot be accepted in the form of a loan.
Sale of real estate
In NL you can obtain the Deed of Delivery from public source https://www.Kadaster.nl or you can collect Deed of Notary (Nota van afrekening) AND Invoice/ Bank statement. We request a bank statement to ensure that the client is indeed using the funds in their account to invest with us, rather than using the money for other purposes, such as purchasing another house or paying off a mortgage.
Rental income from real estate
In NL it is possible to obtain the real estate overview on public source https://www.kadaster.nl or https://www.wozwaardeloket.nl/. This should show the type of tenants or properties (whether private or business buildings), the addresses, current values, purchase values (as listed on the Land Registry extract).
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