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Cost of living

The more you wish to stay out and travel, the more the cost. So the real cost of living is of course dependent on the person. Here is my opinion on the cost of living of an average Indian.

  1. House rent can cost from €250 (for a small single bedroom with shared bathroom) to couple of thousands. The average for the employed including gas, water, electricity is about:

*  €500 for bachelors sharing accommodation with colleagues

*  €950 for a single bed-room house for a couple

*  €1150 for a double bed-room house for a couple with 1 or 2 kids

v  For people working in Amsterdam, Almere city is considered economical to live in. Amstelveen is popular because of the huge Indian population there.

  1. The mandatory basic health insurance costs € 100 per person per month.
  2. Travel by bus within a city with OV chipkaart is about €1.50 per leg of travel.
  3. Hotel stay costs can vary by hotel type. Economical but decent enough will cost about € 65 per night.
  4. Grocery cost per person is about €40 per month
  5. A visit to Indian restaurant for a good dinner will cost about €25 per person, (drinks extra )
  6. A visit to Mac Donald, Subway or other fast-food for a meal will cost about €7 per person
  7. A visit to a pub will cost about €2.00 per glass of drink
  8. Pizza will cost about €10 per person
  9. Clothes will cost about the same as in India for the same quality.
  10. Post-paid mobile bill will be about €30 per month…but will depend on your plan/need
  11. Mobile phones will cost almost same as in India or even costlier (except if there is Sale). Other electronic items are generally cheaper.
  12. Cable TV, telephone, high speed internet together will cost about €50 per month.
  13. Garbage tax costs about 100 per head per year but depends on the city. If you are moving to furnished house, often the house owner takes this cost.
  14. Popular cinema complex is Pathe. Ticket costs about €10 per movie. But for just €19/month, you can also enjoy unlimited movies for the month! For details, see http://www.pathe.nl
  15. Formal footwear is €50 or above
  16. Fuel costs €1.75 per liter. Average city mileage of a car is 10kms/ltr and highway is 14kms/ltr
  17. Owning a car will cost about €40/month insurance (3rd party), €40/month road tax, €200/year car service, €90/year for ‘roadside assistance’ membership and depreciation of about €1000/year (depending on the age of the car). Of course if someone /yourself vandalizes/damages your car or it breaks down, it will cost you extra. Reserve €500/year for this.
  18. Taking a car from the company on lease basis will cost about €400/month, but generally fuel expenses are fully reimbursed by the company.
  19. Schooling:

v  international school for kids up to 4yrs costs about €250/month

v  Dutch peuterplaza for kids up to 4yrs costs  €50 to €100 per month

v  For 4+, international school costs about €4000 to €6000 per year depending on the school

v  For 4+, Dutch school costs less than €30 per month (in concept, it is free)

  1. Day Care costs (approx):

*  0 to 4yrs – full day – €1500/month, but you will get a refund of about €300 to €700 from the government depending on your combined annual income

*  4+yrs – after school – €700/month, but you will get a small refund from the government depending on your combined annual income

*  To calculate the approx. govt refund: http://www.belastingdienst.nl/rekenhulpen/toeslagen/.

  1. A vacation within Europe costs about €500 for a bachelor and about €1000 for family

Salary,Taxes & Benefits

Take home salary:

A rough calculation is as follows:

  1. Know your monthly gross (excluding bonus, holiday allowance etc)
  2. If your employer is paying for the health insurance, add € 200 per adult in your family including you .
  3. If 30% ruling is applicable, multiply above value by 0.7. Else multiply by 1. This is the ‘taxable wage’.
  4. Multiply upto €55,500 of your ‘taxable wage’ by 0.58.
  5. Multiply anything exceeding €55,500 by 0.48.
  6. If 30% ruling applies to you, multiply 3 by 0.3. Else it is 0.
  7. Add values from 4, 5 and 6. This is your very rough take home salary for the month.
  8. Note: Employer may also pay bonus, 1 month salary/year as holiday bonus etc. This is taxed at 52% flat.
  9. There are also some tax credits to the tune of about 3000 euros per year that apply.

A good tax calculator is available at http://www.expatax.nl/calculations/grosstonet/gross-net.htm

30% ruling

A person employed directly from abroad may be eligible for ‘30% ruling’. If you are approved, your first 30% of the salary is completely tax free for the first 8 years of your stay in Netherlands. Income tax is calculated according to the tax-slab on 70% of your salary. For details on eligibility criteria, following websites can be useful: 

http://www.taxpat.com/en/F.A.Q.-s/Questions-Regarding-the-30–Ruling–Netherlands-Tax-Benefit-#1 

http://www.expatax.nl/30ruling.php

Non-working spouse tax refund: 

A non-working spouse is eligible to get approx €160/- per month as tax-refund. You need to apply for it at a local tax office. Go to your local tax office and explain your background. They will help you fill the form. You will need your Residence Permit/Passport, BSN, spouse salary slip, bank account number of you or spouse.

For correct information always contact local tax office.

Grocery shop:

Albert Heijn will most likely be your grocery shop of choice. They give free ‘bonus card’. Ask for it. When shopping in future, if you show this card at the checkout counter, you will get discounts on some items.

Child care benefit:

For each child, you will get a refund of about € 150 per quarter from the SVB. Go to their website and apply.

Tax-refund for first year: 

For the employed, irrespective of when you move to Netherlands, your employer will withhold tax from your salary as if you were earning for the full year. So if you have moved to NL after January 1,  you have most likely paid more taxes than you should have. You can claim this back from the tax-office in the next year. The procedure is: at the beginning of the next year (ex;2013), your employer will send you an annual statement called ‘Jaaropgave’ for the previous year (ex:2012). After you receive this, call the tax-office (0555 385 385) and request for a tax/return form (they will speak in English on this number). You will get a booklet via post. Though the form is in Dutch, an English version of the instructions manual for 2008 is available on their website (click here for the manual). There will be minor differences between 2008 M form and the current year M form. But the manual should be a good help. Fill the form and send it.

Important points:

- the tax form will ask only your income declaration. Refund will be calculated by the tax-office

- if you have received your 30% ruling approval close to the year end or after the year end, enclose a copy of your 30% ruling approval and also a letter saying your 30% ruling has to be accounted when processing your tax return. This is because your employer would have held taxes from you as if you did not have the 30% ruling until it is approved. The employer will normally adjust the refund in your subsequent month’s salary within the tax year. But in case there was no scope for adjustment, then you need to claim it back and this is where the letter will help. Note: Irrespective of when you have come to NL

Tax-free school fees: I

If you have 30% ruling and a school going child(ren), you can save some money. When filling the school-fee form at the beginning of the year, request for the school fees to be billed to your employer. Your employer will pay this invoice, but will deduct an equal amount from your gross. Since your gross reduces, you do not pay tax on the reduced amount. This will save you about 40% to 52% of the tuition fees depending on your tax bracket!!

Tax-free shopping:A foreign resident/visitor can claim the VAT refund when leaving the EU permanently. Ask for a tax-free form when doing your shopping. When leaving, at the airport show your purchases, tax-free forms and passport to customs officials and claim your refund! Found this link to have good information: http://www.taxfreeworldwide.com/lang-en/what-is-tax-free-shopping.html

Tax refund for the year you left NL:  If you have left Netherlands before Dec-31, you will have paid too much tax. Once you get the jaaropgave from your company for the year you left, file the taxes as a non-resident to get the refund of excess tax paid. You can do it on your own but best is to get it done via tax consultant.

Pension at retirement:  For every year of working in NL, you are eligible for 2% of AOW value as monthly pension after you reach retirement age (about 66). The AOW value is determined by SVB every year depending on inflation etc. In 2013, its value is about €725.00. For example, if you spent 5 years in NL, you would be eligible for 10% of the AOW value as pension.

http://www.svb.nl/int/en/aow/index.jsp

Money Transfers to India

Below are some of the options people use for transfer of money to India.

v  (NL) Bank to (India) Bank transfer – ABN charges 0.1% transaction fee to transfer your Euros to your bank in India. Transfer takes about 3 working days. The bank in India receives the Euros and converts it to Rupees. The exchange rate you get is about 25 paise (0.3%) less than the market exchange rate of day 3 for nationalized banks- but you cannot be sure because the rate fluctuates through out the day. Nationalized bank do not take commission – only service charge of Rs 1500 or so. But you will find that private banks give much lesser conversion rate. Sometimes you can call your India bank manager and ask them to hold for sometime before conversion to rupee – if you wish so.

v  transferwise.com: they will convert Euro to Rupee themselves and then transfer the amount to your bank in India. They charge about 0.5% transaction fee, but claim that they will give market rate exchange price. An advantage though is that you can set an instruction as to what is the minimum exchange rate you want. (Note: the website claims that they are so much better than bank transfer – the values they show are not true at least for Indian banks. So don’t fall for it. You will also see many people on facebook etc blindly (and shamelessly?) vouching for transferwise and will also give you a link….this is because they will get a commission when you use their link. So think before you decide which method is beneficial for you)

v  money2india, hdfcremit etc: These also convert Euro to Rupee themselves. Some offer fixed (but much lower rate) and variable (day 3 rate) exchange rate options. On top of this, there is a % transaction fee. On the variable option, the exchange rate is not transparent. They probably make money taking a cut from the conversion rate. Transaction takes 1 day OR  3 working days based on your choice. 

Investments & Savings

Keeping money in the Bank:

  1. Bank interest in NL is around 1% if you maintain your money in the “savings account”
  2. NL Banks offer you different products that can get you higher interest upto about 5%. If you want to keep your money in Euros, better option is to keep the money in an FCNR bank account in India – the interest rate is guaranteed.
  3. If your savings is more than € 20,000 you need to pay “Savings tax” @1.2% of the entire savings (goes into Box 3 in the tax filing form). However, if you have 30% ruling, this tax is not applicable making it effectively 0%.
  4. If you don’t mind the risk of Rupee devaluation, keeping the money in a FD in a NRE account in India makes more sense. The interest from NRE account is tax free. Different banks give different interest rates. So check on the internet which bank gives the highest rate. The money is also fully repatriable (i.e you can convert them back to Euro) at the current rate.

Stock Market:

  1. It is allowed to open a trading account and invest in the stock market. Whatever money you have invested + gained in the stock market is subject to “Savings” tax applicable @1.2% (to be filled into Box 3 in the tax filing form). However, if you have 30% ruling, this tax is not applicable making it effectively 0%.
  2. There is no short term and long term gains concept. All gains fall under point 1 above.
  3. You can open a trading account with many banks.
  4. Each transaction costs €10 to €150 depending on the volume of shares traded. On top of it, banks may charge maintenance fee.
  5. It is allowed to trade in other country stock exchanges via a Dutch trading account. For example, you can trade US stocks listed in NASDAQ, UK stocks etc. with your Netherlands trading account. Again, bank may charge extra for this service.
  6. ESOP is taxed like in India when it is exercised – (FMV on exercise date – grant price)*% time spent in NL during the vesting period. Check this link for an example:

      http://www.globalequity.org/membersonly/GlobalUpdates/NetherlandsPlcyStatmnt32202.pdf

 Some legal Matter tips

Legal Consultation for free:  Visit http://www.juridischloket.nl

Vehicle accident: If someone hit your car when it was parked but the owner is not to be seen, call the police. They will most likely not come for minor accidents, but they will give you a file number. Use this number and call your car insurance for repair.

** Information references and credits : http://indiansinnetherlands.com/