Business to business

Providing services

Netherlands - United Kingdom
According to the general rule, after a no-deal Brexit a service provided to a VAT-registered business in the United Kingdom will be taxed in the customer’s country: the United Kingdom. The VAT-registered seller does not include any VAT on the invoice and instead states 'VAT Out of Scope'. This turnover is not entered on the VAT return.

United Kingdom - Netherlands
After a no-deal Brexit, services that a Dutch VAT-registered business has purchased from a VAT-registered business in the United Kingdom will be taxed in the Netherlands and entered under questions 4b and 5b of the VAT return, unless an exception applies to the service in question.

Supplying goods

Netherlands - United Kingdom
After a no-deal Brexit, goods supplied to a customer in the United Kingdom will be regarded as an export and the VAT will be zero-rated. An export declaration will have to be submitted to the Dutch customs authorities and this turnover will be entered under question 3a of the VAT return. The VAT-registered business will have to retain the customs documents in its records to substantiate the zero rate of VAT.

An import declaration will also have to be submitted in the United Kingdom. Some Dutch VAT-registered businesses do not want to burden their customers in the United Kingdom with import formalities and are planning to take care of these formalities themselves. That means these businesses will need to apply for a British VAT number, pay import VAT and charge British VAT.

From 2021 the United Kingdom is introducing a scheme under which import VAT will not have to be paid in the UK at the same time as the goods are imported. The VAT will be declared and recovered on the same VAT return. This scheme will apply to all VAT-registered businesses in the UK. Dutch VAT-registered businesses that wish to do business in this way are advised to register soon, as there is currently a long processing time for registrations.

United Kingdom - Netherlands
After a no-deal Brexit, a Dutch VAT-registered business that buys goods from the United Kingdom and imports them will have to submit an import declaration to the Dutch customs authorities, pay import duties and VAT on the import to the customs authorities and then claim back this VAT on its VAT return under question 5b, unless it holds an Article 23 permit.

A VAT-registered business that applies for an Article 23 permit can enter the VAT owed on imported goods on its VAT return under question 4a instead of having to pay the VAT immediately at the time of import. The import VAT can be claimed back under question 5b of the VAT return. It is possible to apply for the Article 23 permit if the relevant requirements are met:

• The VAT-registered entrepreneur lives in, or the business is established in, the Netherlands
• The VAT-registered business regularly imports goods from non-EU countries
• The VAT-registered business keeps separate records indicating how much import VAT is owed
• The VAT-registered business files a VAT return on a monthly or quarterly basis

Business to consumer

Providing services

According to the general rule, a service provided by a Dutch VAT-registered business to a consumer in the United Kingdom is taxed in the Netherlands. After a no-deal Brexit, the Dutch VAT-registered business will have to charge 21% or 9% VAT and enter this under section 1a or 1b of its VAT return.

Supplying goods

Sales of goods by a Dutch VAT-registered business to consumers will be regarded as exports and no VAT will be owed in the Netherlands. The Dutch VAT-registered business will enter this under section 3a of its VAT return.

Preparing for a no-deal Brexit

VAT refund

Dutch VAT-registered businesses that are entitled to a refund of VAT paid in 2020 in the United Kingdom can claim this in the usual way via the portal of the Dutch Tax and Customs Administration. It is important that VAT paid in 2020 in the United Kingdom is claimed back before 1 January 2021.

EORI number

A Dutch VAT-registered business requires an EORI number to do business with VAT-registered businesses outside the EU. It is a good idea for a VAT-registered business to check what its EORI number is now, or apply for one if necessary, to avoid any trading difficulties after 1 January 2021.

Article 23 permit

If you are a Dutch VAT-registered business, apply for an Article 23 permit via the website of the Dutch Tax and Customs Administration if you do not yet have one.
Please note: Brexit is and will remain the subject of much uncertainty, but it is important to make preparations in good time as 1 January 2021 draws ever closer.

Business to business

Verrichten van diensten

Nederland - Verenigd Koninkrijk

Een dienst verricht aan een btw-ondernemer in het Verenigd Koninkrijk is volgens de hoofdregel na een harde Brexit belast in het land van de afnemer, het Verenigd Koninkrijk. De btw-ondernemer vermeldt geen btw op de factuur maar de woorden 'VAT Out of Scope'. Deze omzet komt niet in de btw-aangifte.

Verenigd Koninkrijk - Nederland

Diensten die door een Nederlandse btw-ondernemer zijn afgenomen van een btw-ondernemer in het Verenigd Koninkrijk, zijn na een harde Brexit belast in Nederland en aan te geven bij vraag 4b en 5b van de btw-aangifte, tenzij het gaat om een dienst waarvoor een uitzondering geldt.

Levering van goederen

Nederland - Verenigd Koninkrijk

Een levering van goederen aan een afnemer in het Verenigd Koninkrijk is na een harde Brexit export en wordt met 0% btw belast. Er moet aangifte ten uitvoer worden gedaan bij de Nederlandse Douane en deze omzet wordt aangegeven bij vraag 3a in de btw-aangifte. De btw-ondernemer moet de douanedocumenten bewaren in zijn administratie om het btw-tarief van 0% te onderbouwen.

Tevens moet er invoeraangifte worden gedaan in het Verenigd Koninkrijk. Er zijn Nederlandse btw-ondernemers die hun klanten in het Verenigd Koninkrijk niet willen opzadelen met invoerformaliteiten en gaan de formaliteiten zelf verzorgen. Dit heeft tot gevolg dat deze btw-ondernemers een Engels btw-nummer moeten aanvragen, btw bij invoer moeten betalen en Engelse VAT in rekening moeten brengen.

Het Verenigd Koninkrijk gaat vanaf 2021 een regeling invoeren, zodat in het VK de btw bij invoer niet op hetzelfde moment als de invoer hoeft te worden betaald. De btw wordt betaald op de btw-aangifte en in dezelfde aangifte in aftrek gebracht. Deze regeling geldt voor alle btw-geregistreerde ondernemers in het VK. Het is raadzaam dat een Nederlandse btw-ondernemer die op deze wijze zaken wil doen, zich snel registreert omdat de doorlooptijd van de registratie op dit moment lang is.

Verenigd Koninkrijk - Nederland

Een Nederlandse btw-ondernemer die goederen in het Verenigde Koninkrijk koopt en importeert, moet na een harde Brexit bij de Nederlandse Douane een aangifte ten invoer indienen, invoerrechten betalen en btw over de invoer bij de Douane betalen om die vervolgens terug te vragen op de btw-aangifte bij vraag 5b, tenzij hij over een artikel 23-vergunning beschikt.

Een btw-ondernemer die een artikel 23-vergunning aanvraagt, mag de btw bij invoer van goederen aangeven in de btw-aangifte bij vraag 4a, in plaats van dat de btw direct bij invoer verschuldigd is. De btw over de invoer kan worden teruggevraagd bij vraag 5b van de btw-aangifte. De artikel 23-vergunning kan worden aangevraagd als aan de eisen daarvoor wordt voldaan:

• De btw-ondernemer woont in Nederland of is daar gevestigd
• De btw-ondernemer importeert regelmatig goederen uit niet-EU-landen
• De btw-ondernemer voert een aparte administratie waaruit blijkt hoeveel btw bij import verschuldigd is
• De btw-ondernemer doet per maand of per kwartaal btw-aangifte

Business to consumers

Verrichten van diensten

Een dienst verricht aan een consument in het Verenigd Koninkrijk door een btw-ondernemer in Nederland is, volgens de hoofdregel, belast in Nederland. De Nederlandse btw-ondernemer moet na een harde Brexit 21% of 9% btw in rekening brengen en dit aangeven in zijn btw-aangifte bij rubriek 1a of 1b.

Levering van goederen

Bij verkoop van goederen door een btw-ondernemer in Nederland aan consumenten is sprake van export en is 0% btw in Nederland verschuldigd. De btw-ondernemer in Nederland geeft dit aan in rubriek 3a van zijn btw-aangifte.

Voorbereiding op een harde Brexit

Btw-teruggave

Nederlandse btw-ondernemers die recht hebben op btw-teruggave van de in 2020 in het Verenigd Koninkrijk betaalde btw, kunnen dit op de gebruikelijke manier via de portal van de Nederlandse Belastingdienst doen. Het is van belang dat de in 2020 in het Verenigd Koninkrijk betaalde btw vóór 1 januari 2021 teruggevraagd wordt.

EORI-nummer

Een Nederlandse btw-ondernemer heeft een EORI-nummer nodig om zaken te doen met btw-ondernemers buiten de EU. Een btw-ondernemer doet er verstandig aan om alvast na te gaan wat zijn EORI-nummer is of, indien nodig, aanvraagt zodat er geen handelsproblemen ontstaan na 1 januari 2021.

Artikel 23-vergunning

Vraag als Nederlandse btw-ondernemer een artikel 23-vergunning aan via de website van de Nederlandse Belastingdienst als u deze vergunning nog niet heeft.

Let op! De Brexit is en blijft een onzekere aangelegenheid maar een tijdige voorbereiding is van belang nu 1 januari 2021 steeds dichterbij komt.

1. Introduction of transfer-tax exemption for first-time buyers

To make it easier for first-time buyers to access the housing market, an exemption from transfer tax will be introduced from 1 January 2021. This exemption will apply to buyers aged between 18 and 35 who are purchasing their own home. If the buyer has already benefited from the transfer-tax exemption or is 35 years of age or older, the current rate of 2% will apply to the purchase. 
The rate of transfer tax applicable to property purchased by investors and legal entities, as well as to homes that are not used as a main residence, will increase to 8% (6% in 2020).

2. Tax allowance and rate for box 3 to be raised

From 1 January 2021 the tax allowance will be increased to € 50,000 per taxpayer. This means savers and small investors with assets of up to € 50,000 (or € 100,000 if they have a tax partner) will no longer pay tax on these assets. Anyone with assets of € 50,000 or more in 2021 will pay 31% tax on the income from these assets from 2021 onwards. A rate of 30% currently applies in 2020.

Please note the asset threshold used to determine whether a person is entitled to allowances will be € 31,430!

3. Reduction in income tax

In 2021 the rate of income tax in the first band (taxable income up to and including € 68,507) will be reduced from 37.35% to 37.10%. From 2022 to 2024 the government will lower this rate further to 37.03%. The rate of income tax in the second band (taxable income from € 68,507) will remain at 49.5%.

4. Reduction in self-employed person’s allowance

To reduce the difference in the tax burden borne by employees and self-employed people, the self-employed person’s allowance will be cut at a faster rate. It will ultimately reach a level of € 3,240 in 2036. The maximum self-employed person’s allowance for 2021 will be € 6,670.

An increase in the employed person’s tax credit from € 3,819 to € 4,205 in 2021 and the cutting of the basic rate of income tax to 37.10% will compensate entrepreneurs for this reduction in the self-employed person’s allowance.

5. Rate of corporation tax to be adjusted

The lower rate of corporation tax will be cut from 16.5% to 15%. With effect from 2021 this lower rate will apply to profits of up to € 245,000 instead of € 200,000. This threshold will be raised further to € 395,000 in 2022. The higher rate of corporation tax will remain at 25%.

6. Fixed budget under work-related expenses scheme to be restricted again

One of the coronavirus support measures that has been introduced is an increase in the fixed budget under the work-related expenses scheme from 1.7% to 3% on the first € 400,000 of the taxable wage bill. This will apply in 2020 only.

From 1 January 2021 the calculation of the fixed budget will be restricted again: up to a taxable wage bill of € 400,000 a rate of 1.7% will apply, with a rate of 1.18% (2020: 1.2%) applicable above € 400,000.

7. Increase in addition to taxable income for electric car

Last year it was announced that the addition to taxable income for the private use of electric cars would be increased incrementally. With effect from 1 January 2021 the addition to taxable income for the private use of electric cars will be 12% (2020: 8%) on a maximum of € 40,000 (2020: € 45,000). Is the list price more than € 40,000? In that case the normal addition of 22% will apply on the amount above this figure.

Over the coming years the addition will be increased further, rising to 16% in 2022 and 17% in 2025. The maximum list price up to which the lower addition is applicable will not be raised and will remain at € 40,000. One new regulation being introduced from 1 January 2021 is that the maximum list price will not apply to solar cars powered by integrated solar panels. The government’s intention here is to anticipate developments on the automotive market.

8. (Re)training to be made more accessible

It is possible that jobs will be lost as a result of the coronavirus crisis. The government is keen to give anyone who finds themselves in this position greater opportunities to retrain. From 2021 employers will therefore also be able to reimburse the training costs of former employees free of tax.

9. Introduction of job-related investment tax credit (BIK)

The details of the scheme are yet to be worked out, but to stimulate investment a new investment tax credit will be introduced, which entrepreneurs can offset against their payroll taxes.

10. Fairer taxation of multinationals

At present, many companies generate profits in the Netherlands, but do not pay any tax, as a result of offsetting losses or certain deductible items. The following measures have been announced to prevent this:

• In future it will be possible to offset a loss without any time limit, although such offsetting will be limited to € 1,000,000 of the taxable profit. If a higher profit is posted, losses can only be offset against up to 50% of the taxable profit above € 1,000,000 in any one year.
• Informal capital structures will also be tackled from 1 January 2022.
• The deduction of liquidation and discontinuation losses in the Netherlands upon termination of business activities abroad will be restricted.
• A study will be conducted to look into the more equal tax treatment of debt and equity.

Travel to code yellow countries

Code yellow countries are countries that have more or less the same infection risks as the Netherlands. The local rules for keeping sufficient distance, hand hygiene and wearing face masks are also similar to those in the Netherlands. Code yellow countries for instance are Germany, France and Italy.

Sick in a code yellow country?

If an employee falls ill during a stay in a code yellow country - it does not matter whether he has simply fallen ill or has contracted corona - he will report sick and is then on sick leave, in which case the employer has an obligation to continue paying his wages.

Repatriation from a code yellow country

The Government will no longer repatriate people from a code yellow country who have contracted corona. If someone takes the risk of going to a code yellow country, this is his own risk. It is also important to check the policy conditions of the health care insurance to see what will be reimbursed.

Travel to code orange countries

Code orange countries themselves indicate that Dutch tourists are not welcome (yet), or the Dutch government indicates that the risk of infection with the coronavirus in that country is even higher than in the Netherlands. Holiday trips to code orange countries are therefore not advised against.

Repatriation from a code orange country

The Dutch Government does not help with repatriation from a code orange country either. But travel organizations have to repatriate travellers who have booked a package holiday with them. This means that in the situation where the country in question goes from code yellow to code orange, people will be repatriated, but this only applies for travellers with package holidays from travel organizations. So not in case of self-booked trips.

Quarantine

If an employee goes to a code orange country, the Government urgently advises to go in quarantine for two weeks immediately upon arrival back in the Netherlands. An employee who consciously chooses to go on holiday to a code orange country therefore knows that he will have to go in quarantine after his return. If he can work from home, this is not a problem. If he cannot work from home, he therefore cannot work. Because he knows this in advance, the employee may take the position that the cause that the employee does not perform his work lies in his own sphere of risk. This may mean that the relevant employee is not entitled to continued payment of salary during the period that he is in quarantine. Another option is that the employee takes days off during the quarantine period.

Quarantine: from code yellow to code orange

If a country goes from code yellow to code orange during the holiday, as a result of which the employee has to go in quarantine during the holiday or after his return, this in principle is not in the employee's sphere of risk. This may be different if there were signals beforehand that the country's code might change from yellow to orange.

Tip! Inform your employees in writing in advance of the consequences if they go on holiday to a code orange country and then have to be quarantined. This way, the employee knows in advance where he stands, and can adjust his choices and actions accordingly.

Attention! As with the code yellow countries, if the employee contracts corona or otherwise falls ill during his holiday, you as his employer must continue paying his wages.

No labour, but wage payment continues

Since 1 January 2020, the main rule in Dutch law has changed from 'no labour, no wage' to 'no labour, but wage payment continues'. The latter is only different if the cause for the non-performance of the work is at the risk and expense of the employee. The burden of proof for this lies with the employer.

Travel to code red countries

Code red countries are almost completely closed to travellers. Travelling to such countries is seriously advised against, because 'life-threatening situations may arise', for example because the country is at war. Your employee will not go on holiday there.

Tip! Do you want to know which countries are yellow, orange or red? Then visit the website “Netherlands Worldwide”, a website of the Dutch Government.

There will now be more compensation available for fixed costs, the redundancy penalty under the Temporary Emergency Bridging Fund for Employment (NOW scheme) will be removed and seasonal businesses will be offered a helping hand. In addition, a partner test will be introduced under the Temporary Bridging Scheme for Independent Entrepreneurs (Tozo).

1. NOW scheme: redundancy penalty removed

The contribution towards payroll costs that can be obtained under the NOW scheme will continue to apply from June to August for companies that suffer a drop in turnover of at least 20%. One important expansion being introduced via NOW 2.0 is that entrepreneurs will now receive a mark-up of 40% instead of the current 30% on their payroll costs.

Redundancy penalty removed

Under the new scheme it is permitted to make employees redundant for commercial reasons without incurring a 50% penalty on the contribution received. Compensation for seasonal businesses also forms part of the new scheme.

Please note: To qualify for the new NOW, companies are prohibited from distributing dividends, paying bonuses to their management and board or buying back their own shares this year.

2. Reimbursement of Fixed Costs for SMEs (in Dutch: Tegemoetkoming Vaste Lasten MKB (TVL)): higher compensation for fixed costs

To date, under the Contribution for Entrepreneurs in Sectors Affected by COVID-19 scheme (TOGS) it has been possible for companies to obtain fixed compensation of € 4,000 for fixed costs. Under a new scheme compensation for fixed costs will now be available up to a maximum level of € 20,000 for the period from June to August. This applies if a company has suffered a drop in turnover of at least 30%.

Please note: The amount of compensation that an entrepreneur can receive on balance depends on the size of the company, the level of its fixed costs and the drop in turnover suffered.

3. Tozo scheme extended: partner test introduced

The Temporary Bridging Scheme for Independent Entrepreneurs (Tozo) is also being extended. Under this scheme independent entrepreneurs who are experiencing financial difficulties can apply for additional assistance to supplement their income up to the level of the minimum social income. The new Tozo will, however, include a partner test. To date, any income of a partner has not been counted when determining the level of the contribution, but this will now be taken into account under the new scheme.

4. Deferment of tax payments: extended until 1 September

The period during which affected entrepreneurs can apply for a deferment of tax payments has been extended until 1 September 2020. Any default penalties for late payment do not have to be paid. The rates of tax interest and late payment interest have been reduced to 0.01% until 1 October 2020 for all types of tax.

In addition, the other tax measures introduced, namely the relaxation of the hour criterion for self-employed persons, the mortgage payment holiday, the VAT exemption for medical aids and the VAT exemption for the loaning out of healthcare personnel, are being extended until 1 September 2020.

Entrepreneurs will be immediately granted a three-month deferment of payments on submission of their first application. An application only needs to be submitted once for this three-month period.

Please note: Entrepreneurs who apply for a deferment of more than three months may not pay out any dividends or bonuses or buy back their own shares.

A deferment granted for more than three months will last until the deferment is withdrawn, which will not be before 1 September 2020. Upon expiry of the deferment entrepreneurs will be offered an appropriate payment arrangement. What this payment arrangement will involve is not yet clear.

5. Continued flexibility in the area of lending (BMKB, GO, KKC, COL)

The additional, expanded or more accessible loans and guarantees that were available to small and medium-sized enterprises, start-ups and scale-ups under the first emergency package will continue. This relates to the coronavirus modules of the government-guaranteed scheme for loans to SMEs (BMKB) and Corporate Finance Guarantee Scheme (GO), the new Small Loans Coronavirus Guarantee Scheme (KKC) and the increased budget for the SEED Capital scheme.

The Coronavirus Bridging Loan (COL), which helps to improve the liquidity position of innovative companies (start-ups and scale-ups), will be allocated an additional € 150 million over the next three months due to the large number of applications received.

NOW scheme

The NOW scheme reimburses up to 90% of the payroll costs of companies whose turnover drops by at least 20%. The drop in turnover is determined by taking 25% of the turnover for 2019 as a reference. This has to be compared with the turnover generated from March to May 2020. However, employers can also take a period starting one or two months later as a basis.

Dutch bank account no longer required

One of the changes concerns the requirement that a company applying under the NOW must have a Dutch bank account number. This requirement will no longer apply, as it is sometimes causing significant difficulties in practice. Employers who have a SEPA bank account number from outside the Netherlands therefore no longer need to provide a Dutch bank account number.

Agreement to publication

Applicants under the NOW also automatically agree to the possible publication of data relating to the NOW application under the Government Information (Public Access) Act (WOB). However, within the context of the subsidy application certain information to which the Employee Insurance Agency (UWV) has access may be competitively sensitive. For this reason it has been decided that the automatic agreement will only apply to a number of items of data that are the most relevant for ensuring transparency of public spending, but do not reveal any business secrets.

Intra-group secondment operating companies

It has been clarified that an intra-group secondment operating company (‘personeels-bv’) within a group cannot take advantage of the NOW scheme itself. However, this option is available to other companies within the group.

Notification of wage expenses subsidy no longer required

Employers who apply to the NOW scheme and are also entitled to the wage expenses subsidy (LKS) for employees with an occupational disability do not need to deduct this subsidy from the amount awarded under the NOW. Consequently, there is no longer any need to notify the local authority of the allocation of the NOW subsidy.

Please note: The turnover threshold above which a declaration from an accountant will be required is not yet known.

Who is under the obligation to report?

The obligation to report applies to foreign employers and self-employed professionals from the European Union, other countries in the European Economic Area (EEA), or Switzerland.

When to report?

You will have to report any new services from 1 March 2020 onwards. However, any services that start on or after 1 March can already be reported with effect from 10 February 2020.

Annual reporting

If you are a service provider or self-employed professional working in the road freight transport sector (SBI H 49.4 according to the Dutch Chamber of Commerce) or if you provide services on the instructions of a company established in the Netherlands, you can report annually. You only need to report once a year then.

How can I report?

A special website is available for reporting. You have to report digitally, e.g. by means of eHerkenning (an initiative of the Dutch government to enable safe login).

Please note! The obligation to report does not apply to passenger transport or to transport by water.

If you have any questions about the obligation to report, please contact us.

Voor wie geldt de verplichte melding?

De meldingsplicht geldt voor buitenlandse werkgevers en zelfstandigen uit de Europese Unie, een ander land binnen de Europese Economische Ruimte (EER) of Zwitserland.

Wanneer melden?

U bent vanaf 1 maart 2020 verplicht uw nieuwe diensten te melden. U kunt diensten die op of na 1 maart beginnen echter al vanaf 10 februari 2020 melden.

Jaarmelding

U kunt gebruik maken van de jaarmelding als u als dienstverrichter of zelfstandige werkzaam bent in de sector Goederenvervoer over de weg (SBI H 49.4). Dit geldt ook als u in opdracht van een in Nederland gevestigd bedrijf diensten levert. In deze gevallen hoeft u zich maar één keer per jaar te melden.

Hoe kan ik melden?

Voor meldingen is een speciale website beschikbaar. Meldingen dient u digitaal in te dienen. Dit kan onder meer met behulp van eHerkenning.

Let op! De meldingsplicht geldt niet voor personenvervoer en voor vervoer over het water.

Heeft u vragen over de verplichte melding, neem dan contact met ons op.

1. Make optimum use of the allowance in the labor costs scheme (WKR)

This year you should also pay out allowances and benefits to your employees that are tax-free up to an amount of 1.2% of the total wage bill of your company. Make optimal use of this allowance and remember that next year this allowance amounts to 1.7% and 1.2% of the excess for the first € 400,000 of your wage bill. If you are running out of allowance for this year, it is better to postpone any reimbursements and provisions until 2020. If you exceed the allowance, as an employer you will pay 80% tax on the excess. Even as a director and major shareholder (DGA), you may use the allowance in the WKR.

2. Pay dividends out this year

In 2020 the tax rate for box 2 will increase from 25 to 26.25%. From 2021 a further increase to 26.9% will apply. It may therefore be worthwhile to make any possible dividend payment before 2020, especially if you use the dividend for expenses or use it to repay a loan. Keep in mind that if you do not spend it before 1 January 2020, you will then pay tax on private dividends as per box 3. How much tax you pay will depend on the size of your assets. This can total a maximum of 1.68% on your assets. You can prevent this by returning the dividend amount to be paid back as a share premium in box 2. Discuss the best options that apply to your situation with your adviser.

3. Purchase an electric car before 2020

If you plan to purchase an electric car, it is advisable to make your purchase before the end of 2019. From 2020, the 4% surcharge for electric cars will double to 8%. In addition, this 8% will only apply to the first € 45,000 of the sale price, instead of the first € 50,000 as is currently the case. You will have to pay 22% on the excess. The low additional tax liability applies for a period of 60 months from the date of first purchase.

4. Avoid a divestment surcharge

If you made use of the investment allowance in 2015 and you plan to sell the business asset again, you will have to deal with the divestment premium. This means that you must repay part of the investment allowance that you received at that time. You can prevent this by not selling the asset until 2020.

5. Take the allowance test into account

If you wish to be eligible for tax benefits, ensure that you do not have an excess of capital on January 1 of next year. For the healthcare allowance and child-related credits, the maximum for 2019 is € 114,776. If you have a partner, a maximum of € 145,136 applies. For the housing allowance a maximum of € 30,360 applies, rising to € 60,720 if you have a partner. The amounts for 2020 are not yet known but are expected to increase slightly. If you have assets above these limits and you are entitled to one or more allowances, it may be wise to reduce your assets. This can be done, for example, by repaying part of your mortgage or by bringing forward a planned large purchase. Entrepreneurs can also reduce the flow of assets from the company to their private funds, or transfer assets from their private funds back to the company. Take good advice if you need to take action to make sure you make the best possible decision for your situation.

6. Reduce your regular DGA salary

Cost reimbursements can be deducted from your regular salary. It does not matter whether these cost reimbursements are taxed or untaxed. Consider, for example, applying a tax-free allowance for meals or travel expenses. The addition for private use of the company car also counts towards your regular salary. For a car worth € 60,000 with a liability of 22%, you could reduce your salary by 60,000 x 22% = € 13,200. As a result of the reduction in salary (which must be at least € 45,000 in 2019) you will pay less tax in box 1.

7. Make any necessary submissions this year to avoid fines

If you do not declare income in box 2, you are likely to receive a subsequent claim and a fine. You can prevent or reduce any fine this year by submitting your return on time. This means that you still declare any income within two years after you made (or should have made) a declaration. If you declare the income after these two years, you will receive a lower fine. This ‘voluntary disclosure scheme’ now also applies to income that is taxed in box 2, such as dividends. This option will disappear in 2020.
The voluntary disclosure scheme now also applies to domestic income in box 3, but that too will disappear from 2020. Therefore, if you have withheld income from box 2, or not yet declared domestic income from box 3, you should submit this before the end of the year if you wish to avoid additional claims and fines.

8. Take advantage of the new allowances for bicycles

A new scheme for company bicycles will be introduced in 2020. Just as with cars, if it is available for private use a liability is calculated based on the recommended retail price of the bicycle. If the bicycle is available for commuting, it is automatically assumed that you also use the bicycle for private purposes. The liability for the bicycle will amount to 7% of the retail price. This liability is counted as your income and you must pay tax on it. The liability does not include any accessories that are purchased, such as waterproof clothing, panniers etc. The normal rules of the labor costs scheme apply here. You can respond to the new scheme by purchasing a bicycle from 2020 onwards. Until then, you can, use your own bicycle for business trips, including commuting, and charge € 0.19 / km for this to your profits. If possible, you can also still coordinate with the tax authorities to apply the 7% surcharge.

9. Final possibility for reduction in accrued self-managed pension funds

As of July 1, 2017, the accrual of your own pension has no longer been possible. As a DGA, you still have until 2019 to choose what you want to do with the pension that you have already accrued. You can:

• ‘stamp’ the pension tax free to its tax value, then surrender it to a 19.5% discount that does not include retrospective interest;
• silently and tax free ‘stamp’ your pension to its tax value, then convert it into a retirement obligation;
• freeze the existing pension under your own management.

The discount is applied to the tax value of the pension as it stood on 31st December 2015, or to the tax value on the surrender date if it is lower than the value was at the end of 2015. If you pay it off in 2019, you therefore owe income tax on 80.5% of the tax balance sheet value as of December 31st, 2015. The difference between the tax value on the surrender date and the tax value on December 31st, 2015 is 100% taxable. If you surrender in 2019 you will not be charged 20% retrospective interest.

10. Reduce your assets in box 3

If you have a lot of private assets, you must pay tax on them in box 3. This tax increases as you acquire more capital. In 2019, you will pay 1.68% tax on taxable capital of more than € 989,736, regardless of the return achieved. With a high level of private capital, it can therefore be worthwhile to use part of it within your company. This means you will pay less tax in box 3.

What are the rules at present (2019)?

As of 1 July 2015, employers can issue three fixed-term employment contracts over a two-year period. When either the fourth employment contract in the series is signed, or if the maximum period of two years in service is exceeded, the contract then becomes one of indefinite length. Attention: the sequence of contracts only resets to zero if there is at least 6 months between two contracts.

Important! The Catering CAO allows shorter interim periods for seasonal labor based on climate and nature. After short term seasonal labor has been completed, employers can then revert to contract lengths of more than three months.

As of 1st January 2020

As of 1st January 2020, the maximum period will be extended from two to three years. The maximum number of contracts within this period remains three, and the interruption period also remains set at six months. With a collective labor agreement this period can be shortened to three months.

Transition allowance rules are also changing

Until 1 January 2020, an employee is only entitled to a transition allowance after two years of service, whereby the allowance is calculated from the first day of their employment. From 1 January 2020, the transition allowance will be calculated and paid from day one of any contract. This also applies to dismissal during the probationary period and to any fixed-term contract that is not extended by the employer. The contract must be terminated by the employer for these rules to apply. The previous arrangements regarding transition allowance (lower allowance for smaller businesses and extended build-up for older employees) expire with effect from 1 January 2020. The accrual for on-call workers is calculated using the average number of hours worked each month.

If the employment contract is shorter than one month, the total amount of gross salary paid is used as the starting point. Please note: if you have already stated in the employment contract that the agreement will be terminated at the end-date specified in the contract, you will automatically also owe a transition payment, because the contract will therefore be terminated at the request of the employer.

Summary

As of 2020, once an employee has been issued with three employment contracts - or after just three years - an employment contract for an indefinite period will apply. The transition payment rules will apply from day one.