Spouses cease to be considered spouses for tax purposes if they have moved apart permanently.
Spouses are permanently separated if they have divorced. In cases where the divorce is still pending, i.e. the legally defined period of reconsideration is still ongoing, we must examine whether the two spouses actually live separately from each other. A change of address, if registered, is regarded as sufficient proof of their living in separation.
Tax treatment may be different after divorce when it has to do with:
- Credits for a deficit in capital income: There is a tax credit of €1,400 per year offered to those who have borrowed money and have interest expenses. The maximum credit amount can be raised for the parent with whom the child(ren) spend more time during the tax year. For this reason there is a question field in the income tax return form regarding the date when the spouses have moved apart and another question field, in cases of joint custody, asking for the primary place where the children live.
- Credits for payments of maintenance: There is a tax credit for those who must pay child maintenance. It is available to individuals whose obligation to pay it either depends on a court ruling or on a court-endorsed agreement. It is further required that the child has not turned 17 before the start date of the tax year. The credit is ⅛ of the paid amount, maximally €80 per year and per child.
- Transfer taxes: When couples get divorced and one spouse moves out of the home they have owned together, it often happens that one of the spouses buys up the other's portion of the home, using money that comes from sources outside their former matrimonial property. In such cases, transfer tax must be paid. Read more about Transfer taxes on an exchange deal and after distribution of matrimonial assets