Optimal distribution between tax partners

Dutch Tax and Customs Administration

This page provides information about the algorithm 'Optimal distribution between tax partners'. This algorithm automatically calculates the most favourable tax distribution of deductions and joint income between partners filing a joint tax return.

Last change on 3rd of June 2025, at 11:35 (CET) | Publication Standard 1.0

• Publication category: Impactful algorithms
• Impact assessment: Field not filled in.
• Status: In use

General information

Theme

Public finance

Begin date

Field not filled in.

Contact information

[e-mail]

Link to publication website

https://over-ons.belastingdienst.nl/onderwerpen/omgaan-met-gegevens/algoritmeregister/

Link to source registration

https://over-ons.belastingdienst.nl/onderwerpen/omgaan-met-gegevens/algoritmeregister/

Responsible use

Goal and impact

When filing a joint income tax return, tax partners must divide joint income and deductions among themselves. In practice, many taxpayers do not achieve an optimal tax advantage in doing so. This can lead to a higher tax burden than necessary.

The algorithm supports taxpayers in determining the most advantageous tax distribution. It does this by automatically calculating a distribution proposal based on the entered data. The user can accept this proposal or adjust it manually. In doing so, the algorithm helps citizens to more easily arrive at a correct and beneficial return. The outcome of the algorithm always concerns a tax optimisation, which does not take into account possible effects on other income-dependent schemes such as benefits.

Considerations

The process of automatically suggesting an optimal distribution between tax partners in the return is important for the financial interest of citizens. We want to do this carefully. The algorithm can support a Tax Administration employee in this process. As a result, the assessment is more careful, efficient and uniform.

The algorithm helps to systematically and accurately calculate a tax-beneficial distribution of deductions and joint income. By deploying an algorithm, these calculations can be done faster. As a result, citizens can get clarity on the expected tax amount faster.

The algorithm determines the assessment based on the relevant data.

The alternative is for a citizen to manually perform and check this apportionment. This would make the process more error-prone and less efficient.

Human intervention

The operation of the algorithm always involves human intervention. The algorithm calculates a tax-optimal apportionment proposal based on the given data and displays it to the taxpayer in the online tax return environment. The citizen himself decides whether he accepts this proposal or wants to use his own apportionment. The responsibility for the chosen apportionment thus lies with the taxpayer.

Risk management

The Inland Revenue is taking several measures to manage the risks of using the algorithm.

• 1. Transparency

The Tax and Customs Administration publishes information about the algorithm in the Tax and Customs Administration's algorithm register and the Central Government's algorithm register.

This allows citizens to understand the use and operation of the algorithm.

• 2. Automated decision-making

The description of an algorithm explains this and also details the aspect of human intervention.

• 3. Privacy protection and legality

The Tax Authority ensures that the use of the data is assessed against the General Data Protection Regulation (GDPR).

The description of the algorithm also links to the applicable laws and regulations.

• 4. Responsibility

On the basis of the Algorithm Register Policy Framework, the responsibilities and tasks when using algorithms are clearly described and secured.

• 5. Monitoring and evaluation

The operation of the algorithms is periodically tested. Based on this, selection rules can be adjusted.

Legal basis

1. General State Tax Act:
2. General Administrative Law Act:
3. General Data Protection Regulation:
4. General Data Protection Regulation Implementation Act:
5. Income Tax Act 2001:
6. Citizen Service Number (General Provisions) Act:
7. Archives Act 1995:

Links to legal bases

• Algemene wet inzake rijksbelastingen: : https://wetten.overheid.nl/BWBR0002320/
• Algemene wet bestuursrecht: : https://wetten.overheid.nl/BWBR0005537/
• Algemene verordening gegevensbescherming: : https://eur-lex.europa.eu/legal-content/NL/TXT/HTML/?uri=CELEX:32016R0679
• Uitvoeringswet algemene verordening gegevensbescherming: : https://wetten.overheid.nl/BWBR0040940/
• Wet Inkomstenbelasting 2001:: https://wetten.overheid.nl/BWBR0011353/
• Wet algemene bepalingen Burgerservicenummer:: https://wetten.overheid.nl/BWBR0022428/
• Archiefwet 1995: : https://wetten.overheid.nl/BWBR0007376/

Elaboration on impact assessments

The use of the data should be assessed against the AVG.

The AVG prescribes that no more data should be used than necessary. This is called data minimisation. The Inland Revenue regularly reviews whether the data used is still necessary and therefore may be used.

Operations

Data

1. Identifying data (national)- identification number/BSN
2. Income tax return details
3. Data on joint deductions
4. Data on joint income
5. Creditable tax credits and redeemability

Links to data sources

• Identificerende gegevens (nationaal)- identificatienummer/BSN: Basisregistratie Personen (BRP)
• Aangiftegegevens inkomensheffing: Belastingdienst
• Gegevens over gemeenschappelijke aftrekposten: Belastingdienst
• Gegevens over gemeenschappelijke inkomsten: Belastingdienst
• Verrekenbare heffingskortingen en verzilverbaarheid: Belastingdienst

Technical design

The algorithm consists of selection rules drawn up by content experts based on laws, regulations and expertise.

Using the data from the return and predefined calculation rules, the algorithm calculates a tax-optimal distribution of joint income and deductions between tax partners. This proposed distribution is displayed as a choice to the user in the online tax return environment (OLAV).

The outcome of the algorithm is a distribution proposal that leads to the lowest possible joint amount of tax due. The user can adopt this proposal or manually choose a different apportionment.

The algorithm is not self-learning. This means that the algorithm does not develop itself during its use.