Signal Tax credits

Stichting Inlichtingenbureau

Tax credits are rebates on income tax and national insurance contributions. As a result, citizens pay less tax and contributions. This can affect the amount of the benefit. If the discount does not appear on the payslip, the Tax Administration pays the amount directly to the citizen. Then St. Inlichtingenbureau informs the municipality.

Last change on 7th of March 2025, at 10:08 (CET) | Publication Standard 1.0

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

General information

Theme

Social Security

Begin date

Field not filled in.

Contact information

https://www.inlichtingenbureau.nl/Over-ons/Contact

Link to publication website

https://www.inlichtingenbureau.nl/Beleidsterreinen/Werk-en-Bestaanszekerheid/Rechtmatigheidscontrole/Heffingskortingen

Responsible use

Goal and impact

The 'Signal heffingskortingen' is part of the information service Samenloopsignalering. An overarching algorithm has been described for this, which answers general questions. For signal tax credits, only specific issues are addressed.

What are tax credits?

Tax credits are rebates on income tax and national insurance contributions. Thanks to these rebates, people have to pay less tax and contributions.

Tax credits can affect the amount of a benefit. If these rebates are not settled through wages, the Tax Administration can pay them directly to citizens. This is done via a provisional assessment, which people have to apply for themselves at the Tax Administration.

Effect on benefits

If someone receives social assistance benefits in the same period, the benefits must be adjusted accordingly. For people receiving IOAW or IOAZ (older unemployed) benefits, tax credits are not considered income or assets. For social assistance benefits based on the Participation Act, tax credits do count as income.

The IB can send a signal to the municipality about the following tax credits:

- Partner's general tax credit (including the least-earning partner);

- Labour tax credit;

- Income-related combination discount;

- Elderly tax credit;

- Single elderly tax credit;

- Young disabled person's tax credit.

Considerations

The algorithm ensures that a municipality only receives the data of their own residents on welfare benefits who are eligible for tax credits. This protects citizens' privacy. An advantage of this algorithm is that it works much faster than when someone does it by hand. This saves municipal employees a lot of time. It also reduces errors.

Human intervention

At the IB, this algorithm does not involve human intervention. The algorithm executes rules devised by humans and is not 'self-learning'. However, the IB does ensure that the processing process has been done properly. The municipality decides whether and how to deal with a change.

Risk management

Citizen privacy is a major concern. That is why we periodically check whether there are risks and what can be done about them. This is called privacy impact assessment (PIA).

Legal basis

For the generic basis of processing personal data, see the algorithm Samenloopsignalering.

Basis of processing Tax Authorities:

• Sections 64(1)(c) and 68 Participation Act.

Basis of processing IB:

• Article 64, third paragraph, and Article 68 Participation Act
• Section 63 of the Work and Income Implementation Organisation Act (SUWI), Section 5.24(1) and (3) of the SUWI Decree & Sections 6.2 and 6.6 of the SUWI Regulation.

Basis for processing Municipalities:

• Section 31(1), Participation Act (Resources) in conjunction with Chapter 8 of the Income Tax Act 2001
• Chapter 5 'Implementation' and Chapter 6 'Powers and facilities of municipalities' Participation Act

See the Data Register Stichting Inlichtingenbureau (Processing Activities Act SUWI / Participation Act). This can be found on the IB's website via the following page: https://www.inlichtingenbureau.nl/Privacy-en-Veiligheid/Privacy-en-burgers

Links to legal bases

Participatiewet: https://wetten.overheid.nl/BWBR0015703/2024-01-01

Link to Processing Index

https://www.inlichtingenbureau.nl/Over-ons/Privacy-en-Veiligheid/Privacy-en-burgers

Operations

Data

The municipality's benefit file (A):

See the algorithm for concurrency signalling.

https://algoritmes.overheid.nl/nl/algoritme/samenloopsignalering-stichting-inlichtingenbureau/15422688

(Temporary) Storage of delivered BSN and associated signals in facility assistance population (customer tracking facility) (B):

Demand file to tax authorities (C):

- BSN

- Municipality code

The response file to the tax authorities (D):

- BSN

- Municipal code

- FIELD CONTENT: If no information is present, the BSN is delivered back with this field filled with the value 00. Otherwise, two lines are delivered;

- 01: Balance of provisional return,

- 02: Date signature,

including information on tax credit(s):

- IB (income tax) + PV (national insurance contribution) general tax credit

- IB + PV part employment tax credit

- IB + PV part old age tax credit

- PV part general tax credit

- PV part labour tax credit

- PV part of combination discount

- PV portion of old-age tax credit

- IB + PV part additional combination discount

- PV portion of supplementary combination discount

- IB + PV part Young Disabled Persons (Wajong) discount

The information provided by tax authorities is temporarily stored in a database. Based on this, the IB compares whether there is overlap and creates signals in case concurrence is detected (E):

Signal to municipality (F):

See the concurrency algorithm for the data that are by default part of a signal. Below the data specifically belonging to this signal:

- Date of the decision of the tax authority

- Name of the tax credit Provisional assessment (total amount of the assessment)

- Total balance (amount of tax credit)

- Portion of national insurance contributions (Portion of national insurance contributions of the tax credit, only applicable for some frontier workers and alpha helpers)

- Status (New: new benefit or new tax credit. Modified: Adjustment of one or more tax credits on BSN compared to previous display. Expired: Tax credit no longer applicable, discontinued or client no longer on benefits).

Technical design

A. A municipality delivers a file relating to the current social assistance population to the IB monthly via the secure client portal. After each delivery, a processing report is published, listing any errors in the delivery;

B. (temporary) storage of delivered BSN and corresponding signals in the social assistance population provision (client tracking provision);

C. The source query file to the Tax and Customs Administration, in which BSNs are queried of social assistance beneficiaries who have (had) a benefit in a period that overlaps wholly or partly with the requested tax credits year;

D. The Tax Administration's source response file containing BSNs with current data on tax credits in the current year. Data relating to the following year are provided in December;

E. The information supplied by Belastingdienst is temporarily stored in a database. On this basis, the IB compares whether there is overlap and creates signals in case concurrence is detected;

F. Every month, provided the municipality has set this up, a signal report is published on the portal with a total overview of the signals of the current population.

External provider

Internally developed