Requirements

To be able to apply for averaging your income, you should fulfill certain requirements:

1. Averaging is only possible for box 1 income which is taxed in The Netherlands.
2. Averaging is only allowed for an uninterrupted period of 3 years.
3. Two averaging periods cannot overlap each other.
4. Did you earn a negative income? In this year your income is assumed to be 0 for the averaging request.

How does averaging your income work?

• Add your box 1 taxable income of the 3 uninterrupted years
• Divide this amount by 3. This is your new (average) taxable income for those years
• De Belastingdienst calculates how much tax you would have paid based on the amount determined at point 2.

Sometimes it’s hard to determine for which period it is most profitable to apply for averaging your income. In this case, it is advised to make a calculation for different periods to see which period gives the best outcome. Here you can see how you make such a calculation. If the calculation gives you an amount bigger than €545 which you should get back, it is possible to do an averaging request. Fill in this form and send it to your tax office.

Averaging your income should be done within 36 months after all tax assessments from the applicable period are received. After applying for averaging your income you will receive the assessment with the outcome within 8 weeks.