From 2020 there will be only two instead of four bands for income tax for people below state pension age. The basic rate of 37.35% will then apply up to an income of € 68,507. Above this threshold the top rate of 49.5% will apply.
People who have reached state pension age will be subject to an adjusted basic rate of 19.45% up to an income of around € 35,000. In addition, the rate of 37.35% will apply up to an income of € 68,507 and above this the top rate of 49.5%.
As a result of the introduction of the two-band system, the tax levied on income will fall by around 2%.
Contrary to previous agreements, the top rate of corporation tax will remain at 25%. This rate, which applies to profits in excess of € 200,000, will, however, be lowered to 21.7% in 2021.
With effect from 1 January 2020 the lowest rate of corporation tax will be 16.5%. In 2021 this rate, applicable to taxable amounts up to € 200,000, will be reduced further to 15%.
In anticipation of proposals designed to future-proof the labour market, the employed person’s tax credit will rise more quickly and the self-employed person’s allowance will fall at a faster rate. In 2020 the maximum employed person’s tax credit will amount to € 3,819 (€ 3,399 in 2019) and the maximum self-employed person’s allowance € 7,030 (€ 7,280 in 2019). The self-employed person’s allowance will be reduced to a maximum of € 5,000 by 2028.
Following the evaluation of the work-related expenses scheme (WKR), four changes are being proposed with effect from 1 January 2020.
With effect from 1 January 2020 the rate applicable to electronic publications (books, educational information, daily and weekly newspapers, magazines and other periodicals that are published at least three times a year) will be reduced from 21% to 9%.
In addition, access to news websites, such as those offered by daily and weekly newspapers and magazines, will also fall under the reduced rate. However, this is on condition that the content does not consist exclusively or primarily of advertising material, video content or listenable music.
With effect from 1 January 2021 the transfer tax on non-residential properties will be raised by 1% to 7%. Such properties include commercial buildings, hotels and guest houses, business premises and land intended for residential construction. The transfer tax on residential properties will remain at 2%.
With effect from 1 January 2020 the addition to taxable income for the private use of electric cars will increase to 8% (2019 4%) on a maximum of € 45,000. Is the list price more than € 45,000? In that case the normal addition of 22% will apply on the amount above this figure.
In 2021 the addition will rise to 12% on a maximum of € 40,000. If the list price exceeds € 40,000, the addition will be 22% on the amount above this figure. In 2022, 2023 and 2024 the addition will be 16% on € 40,000, and in 2025 17% on € 40,000. Ultimately, by 2026 the addition for electric cars will also amount to 22%.
Withholding tax on interest and royalties will be introduced with effect from 1 January 2021. The rate will be linked to the top rate of corporation tax, which will amount to 21.7% in 2021.
With effect from 1 January 2021 the payment discount for corporation tax will be abolished. From that point on, companies that settle their corporation tax assessment in advance in a single payment will no longer receive a discount.
It is proposed that the study-cost allowance for income tax purposes be abolished. The study allowance will be replaced by the STAP budget subsidy scheme (learning and development budget intended to enhance a person’s labour market position) for people with a link to the Dutch labour market. Further details about the STAP budget subsidy scheme are not yet available. Consequently, the study allowance will not be abolished until after 2020.
In addition to the top ten most important changes from the 2020 Tax Plan, as outlined above, a number of legislative proposals were missing. These include, for example, a proposal to replace the current Assessment of Employment Relationships Deregulation Act to future-proof the labour market, and a proposal relating to the previously announced change to the tax levied in box 3. A legislative proposal relating to the taxation of excessive loans received by shareholders from their own company, commonly known as the ‘dga’ (director and principal shareholder) tax, will also follow in the fourth quarter.
What proposals and changes in the area of taxation did Dutch Minister of Finance Wopke Hoekstra pull from his briefcase on the third Tuesday of September 2019? A brief explanation of the ten most important ones is provided below.
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It is only possible to reclaim VAT on business expenses. For example, the vat paid for your hotel costs whilst attending a conference abroad.
In order to reclaim your VAT from other EU-countries, a special rule applies. The VAT paid on these expenses can be reclaimed digitally through the Dutch Tax authorities. You can log on to the website of the Dutch Tax Authorities (Belastingdienst.nl and search for ‘Reclaim VAT from the EU’). In order to do so, you will need login details which you need to apply timely and digitally.
The deadline for reclaiming VAT, which was paid during 2018, is 1 October 2019. Make sure to apply your login details well on time, if you haven’t done that so far, because processing the reclaim request could take up to 4 weeks.
You could reclaim VAT from other EU-countries as long as you cross the limit of € 50 per country. If you reclaim a smaller amount than the previous mentioned € 50, there is no certainty on whether you actually would get the VAT back.
Reclaim your paid VAT from the UK as soon as possible because of the Brexit. According to the situation now, the Brexit will take place no later than 31 October 2019.
Reclaiming VAT from another EU-country can be a considerable administrative task. For example, you could be required to scan invoices. Therefore, in most occasions it is not worth it to reclaim small amounts of paid VAT.
If you want to reclaim paid VAT from outside the EU, you are required to contact the Tax Authorities of that country. They can provide you with the information about whether it is possible to reclaim that paid VAT and which conditions apply for reclaiming your VAT from that country.
Just like previous years, VAT paid by companies based in The Netherlands on business expenses abroad can be reclaimed. Has your company paid VAT abroad, make sure to timely reclaim the VAT and keep an eye on the terms and conditions.
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Trade unions and leading agricultural and horticultural organizations have set up the Flexible Accommodation Agricultural Quality Certificate to guarantee the quality of housing for migrant workers. Annual reports from the SZW inspection service report regular issues with temporary accommodation for transient labor. It is estimated that every year around a hundred thousand such migrants require accommodation while working in the agricultural sector.
The Flexible Accommodation Agricultural Quality Certificate guarantees the quality and safety of short-term housing offered to migrant workers. Employers with this certificate can deduct a maximum of 20% of minimum wage of the staff for whom such accommodation is provided. The certification document sets out clear rules on cooking facilities, sanitary ware, hygiene and maintenance, among others.
These standards have been set by employee and employer organizations using earlier collective agreements as a starting point. A company must undergo an annual inspection to receive valid certification. LTO Nederland will manage the certification process and it will be introduced in phases. They expect that at least a thousand businesses will start using the quality mark.
The Ministry of Social Affairs and Employment has established a transitional period until 1 September 2020. This will enable businesses that offer accommodation to adjust the rent to the wage paid to the worker according to the new rules. No fines will be awarded until after the transition period has expired.
Farmers and fruit and vegetable producers who make use of temporary migrant labor can now acquire a new certificate for the accommodation they provide to their staff. From September 2020, all agriculture companies that hire migrant workers and offer accommodation to workers (paid for with deductions from workers salary) must be certified.
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You will only be asked to declare your global income if either you or your partner live outside the Netherlands and receive a tax allowance, such as the healthcare or childcare allowance. You will also receive this form if you or a family member has lived outside the Netherlands and paid a ZVW foreign contribution to the Central Administration Office (CAK).
Your global income is your combined income from the Netherlands and all other countries combined. For example, if you enjoy profits abroad and a fixed salary in the Netherlands.
The following amounts are determined using your worldwide income:
Any amounts that you have already received plus any contributions that you have previously paid are only provisional and can only be definitively determined after your world income has been declared. After this statement has been submitted you will receive a decision from the Tax Authorities. This will state your global income, divided into income taxed both in the Netherlands and abroad.
Important! If you do not declare your worldwide income, you must, among other things, repay any allowances that you have already received.
If you are unable to return the statement on time, it is important to request a delay before the final delivery date on your statement.
The Dutch Tax Authorities have sent the forms on which you must declare your global income. Your global income is your income in the Netherlands and from all other countries combined. You are required to provide this information.
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An on-demand employment contract is a collective term for zero-hour contracts and ‘min-max’ contracts. This means contracts with a deferred performance obligation: the employer calls on the employee if there is work available and the employee is subsequently obliged to come. It is a characteristic of such contracts that the number of hours to be worked is not clearly defined.
There is a clear definition of an on-demand employment contract: an on-demand agreement is when the (hours) scope of the work to be performed is not explicitly defined as a specific number of hours per period (at most one month or year), and where the salary payment is not uniformly spread over that time period.
Reimbursed accessibility services are not considered on-demand agreements.
If the number of hours to be worked is not clearly defined, the employer must now make a request to the employee at least four days in advance of the work required, otherwise the employee is not obliged to agree to perform that work.
How must this request be made? This must be done in writing or digitally (for example by e-mail or WhatsApp). If the employer does not do this, the request has not been made correctly. With a collective labor agreement, a shorter request term can be agreed (but never less than 24 hours).
If the request is (partially) withdrawn within four days from the start of the work, or if the employer changes the times, the employee is entitled to wage payment for the period for which he was originally called.
Tip! Withdraw a request in writing, as an oral withdrawal is not legally valid. You must then still pay the wage for the hours for which the employee was originally summoned.
An important change is the requirement to offer a fixed amount of work. The government wants employers to offer employees (annually, in the 13th month) a fixed number of working hours, during which the payment of wages is not excluded.
This offer of a fixed number of hours should be based on the average amount of work in the previous twelve months (the reference period).
If the employer does not make such an offer, the employee is entitled to the unused wages from the latest date when the employer should have made the offer. The government now proposes that in such cases there is a right to wage payment for the hours that the employee would have worked if the employer had made the offer and the employee had agreed to it.
For employees who have been working for more than twelve months on an on-demand contract, a transitional provision is included that stipulates that the employer must submit an offer for a fixed number of hours of work within one month of the time this amendment becomes law.
Caution! The legislative proposals for on-demand employment contracts must take effect on 1 January 2020.
The bill "Law on balance in the labor market" has been adopted by the Dutch House of Representatives. Entrepreneurs who regularly work with on-demand workers need to be aware of future changes.
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This postponement means that the UK has up until to the last day of October to agree with the withdrawal agreement that Prime Minister May agreed with other EU leaders, or to offer alternatives. However, Donald Tusk, President of the European Council, indicated that the Withdrawal Agreement cannot be renegotiated.
Now that the UK has received an extension, the immediate danger of a hard Brexit, or 'no deal' Brexit has been averted. The UK should have left the EU on Friday 12th April.
This postponement means that there are no immediate changes to indirect taxation, including VAT. Without this postponement and without a deal in place, the UK would have become a so-called 'third country' upon the original exit date.
A consequence of this would have been that when importing and exporting to and from the United Kingdom, VAT must be declared and paid at the border, unless you have a so-called Article 23 license. Possession of this license means that you do not have to pay VAT at the border, but can instead transfer it to your VAT return. These rules are now expected to apply from October 31st of this year.
The consequences for direct taxes - such as income tax - would have remained limited, even without this extension. This is because the transitional rules regarding Brexit: in the case of leaving without a deal there would be assumed that the United Kingdom would remain part of the EU until 2020.
Recently, European Leaders took the decision to offer the British government a delay of up to 31st October this year on leaving the European Union. It is still possible for the UK to leave the EU prior to this date.
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Let op! De deadline voor de Brexit is nu 12 april (eerder was dat 29 maart). Maar gisteren kondigde premier May van het Verenigd Koninkrijk (VK) aan dat ze uitstel van de Brexit wil tot 22 mei. De 27 andere EU-lidstaten moeten unaniem instemmen met dit verzoek.
De gevolgen voor de meeste directe belastingen zijn door het overgangsrecht beperkt. Dit betekent dat voor directe belastingen, zoals de loon- en inkomstenbelasting, bij een no deal tot en met 2019 ervan wordt uitgegaan alsof het VK nog steeds lid van de EU is.
Het overgangsrecht heeft volgens de toelichting alleen betrekking op lopende boekjaren. Dit betekent dat een no-deal-Brexit gevolgen heeft voor boekjaren die beginnen na de datum van de terugtrekking van het Verenigd Koninkrijk.
Een no-deal-Brexit heeft volgens de staatssecretaris ook tot gevolg dat de bestaande Europese regelgeving op het gebied van sociale zekerheid niet meer geldt in de relatie met het Verenigd Koninkrijk. Na een no-deal-Brexit wordt dus teruggevallen op het nationale recht.
Let op! Hierdoor kan de verzekeringsplicht van personen die zich bevinden in een grensoverschrijdende situatie met het Verenigd Koninkrijk vanaf de datum van de Brexit al wijzigen.
Dit betekent dat de verzekeringsplicht opnieuw moet worden vastgesteld aan de hand van nationale wetgeving. Dit kan leiden tot gevallen van dubbel verzekerd dan wel onverzekerd zijn en daarmee van dubbele premiebetaling of afwezigheid van premiebetaling.
Om dit te voorkomen zijn afspraken nodig over de coördinatie van de nationale bepalingen inzake de sociale verzekeringen. Bezien wordt nog welke mogelijke afspraken er met het Verenigd Koninkrijk gemaakt kunnen worden.
Tip! Tref nu alvast voorbereidingen om uw personeel zelf te verzekeren tegen bijvoorbeeld arbeidsongeschiktheid als u het risico van niet-verzekerd zijn, wilt voorkomen.
Britten die in Nederland recht hebben op toeslagen, hebben begin januari een brief ontvangen met meer informatie. Daarnaast is een brief in voorbereiding over de veranderingen op het terrein van toeslagen aan Nederlandse toeslaggerechtigden in het Verenigd Koninkrijk.
Ontvangers van een toeslag die hun toeslag kwijtraken bij een harde Brexit, moeten deze in beginsel zelf stopzetten. De Belastingdienst is echter van plan de toeslagen zelf stop te zetten als deze nog niet door de burger zijn stopgezet.
Met de deelnemingsvrijstelling voorkomt u dat winst die al eerder is belast bij een dochtermaatschappij, nog een keer wordt belast bij de moedermaatschappij. Wanneer door een harde Brexit niet meer wordt voldaan aan de voorwaarden voor de deelnemingsvrijstelling, betekent dit dat voordelen van de deelneming die zijn toe te rekenen aan de periode van vóór de Brexit, zijn vrijgesteld. Daarentegen zijn de voordelen die zijn toe te rekenen aan de periode na de Brexit, niet vrijgesteld. Deze voordelen zouden dus moeten worden gesplitst. Dit leidt tot administratieve lasten voor de betreffende bv's en tot uitvoeringslasten voor de Belastingdienst. Door het aangekondigde overgangsrecht hoeft dit voor het jaar 2019 echter niet plaats te vinden. De knip zit dan dus per einde boekjaar.
Door het aangekondigde overgangsrecht wordt het Verenigd Koninkrijk geacht nog deel uit te maken van de EU gedurende het gehele boekjaar dat is begonnen vóór of op de datum van de no-deal-Brexit. Dit heeft tot gevolg dat een fiscale eenheid die door de Brexit zou verbreken, niet op de dag na de datum van de Brexit verbreekt, maar uiterlijk aan het einde van het boekjaar.
Er komt geen overgangsrecht voor dividendbelasting die betaald moet worden over dividenduitkeringen na de datum van de Brexit. Bij een no-deal-Brexit is de datum van uittreding voor de verschuldigdheid van dividendbelasting dus bepalend.
Het Verenigd Koninkrijk is het nog steeds niet eens over de Brexit en de vorm ervan. Nederland heeft, vooruitlopend op een harde Brexit, eerder overgangsrecht aangekondigd. Een toelichting hierop werd onlangs verschaft door staatssecretaris Snel van Financiën. De hoofdlijnen.
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On 29 January 2019 the European Regulation on matrimonial property law came into force. This regulation will be applied by judges in each Member State of the European Union. Judges will apply this regulation for 'international divorces'.
A case is considered 'international' if you and your spouse have a foreign nationality or multiple nationalities. This regulation can also apply if you have lived abroad together immediately after your marriage
Judges will first assess whether they are qualified to hear the case. If the court decides to assume jurisdiction, it must first check which law applies. It is important to know that the Dutch judge cannot always apply Dutch law. The regulations and treaties specify which laws the court must apply.
This legislation only concerns matrimonial property law. The legislation regulates whether Dutch law applies to the general community of property (until 2018) or limited community of property (from 2018) or if the laws of another Member State must apply. This decision can have very different consequences. While the new regulations are not explicitly concerned with alimony, it is quite possible that different laws regarding alimony must be applied by the Dutch court.
Important! The new legislation only applies to matrimonial property law and not, for example, to the establishment of alimony obligations.
The judgment determines that the following laws must apply:
Important! The court may make an exception and decide that the right of the first joint residence does not apply if the parties subsequently moved to another country for a significantly longer period and would be expected to have assumed that the rules of that country would apply.
You may be affected by these new rules if you were married on or after January 29th, 2019, or if you were married before then but only legally registered this marriage after January 29th, 2019. For cases prior to that date, the Hague Matrimonial Property Convention of 1978 still applies. For marriages declared prior to 1 September 1992, other rules apply, namely the rules laid down in an important judgment of the Supreme Court.
Tip! If your marriage is ‘international’ make sure you are aware which law applies. This will avoid any unpleasant surprises if you subsequently divorce at a later stage.
It might be the case that spouses opt to apply the law of a particular country. This is called a choice of law. The legislation determines when that choice of law is valid. For parties living in one EU Member State, for example, the choice of law must comply with the rules of a prenuptial agreement in that Member State. Under Dutch law this is only possible when confirmed via a notary. You can then choose the right of habitual residence or the nationality of one of the spouses.
Tip! Check carefully whether a choice of law is valid. If the choice of law does not prove valid, this may have major and possibly unpleasant consequences.
If no choice of law has been made the new legislation will apply.
Does your situation resemble an ‘international divorce’? Make sure you get good advice.
New European legislation now applies to couples planning to divorce if the couple has lived abroad directly after their marriage, or if both (also) are foreign nationals. This judgment applies to matrimonial property law and determines whether the divorce should fall under Dutch law, or that of a foreign country.
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Snel has informed the Dutch Parliament on this matter. If the UK leaves the EU on March 29th without a deal, the UK will become a so-called ‘third country’ and different rules will apply to trade and tax agreements.
According to the Minister of Finance, a no deal Brexit has corporate tax consequences for tax groups in cases where a so-called ‘top holding company’ is established in the UK. A no deal Brexit would mean that such a tax group is automatically terminated , according to the Minister.
Dutch citizens resident in the UK for whom income is (partially) taxed in The Netherlands will lose the right to personal deductions after Brexit. There are numerous other examples of a no deal Brexit having direct consequences for companies and citizens.
Snel wishes to implement a ruling where the UK will continue to be treated as a member of the EU for the remainder of the current financial year. This will ensure that the current tax regime continues to apply in the event of a no deal Brexit. In addition, he proposes transition laws for companies, for example to prevent different tax regulations being applied during the same financial year.
Menno Snel, Dutch Minister of Finance believes that in the case of a hard Brexit on March 29th, 2019, a transitional tax law, apart from customs legislation, is desirable . A hard Brexit means an immediate change in tax procedures for companies and citizens.
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Important!Certain changes planned by the Cabinet still require parliamentary approval.
As of 2019 the income tax rates will be lowered, as also planned for the following year. Most deductible items can be deducted at a lower rate in the years ahead. Next year, the corporate income tax rate for the first € 200.000 of profit will fall from 20% to 19%. Consult your tax advisor to decide if it is therefore lucrative for you to postpone confirming your revenue and to increase your costs. It might also be wise for you to pay deductions on items such as donations and healthcare already this year, where possible.
Make full use of your remaining allocation of 1.2% in the labor costs scheme. You can still use any remaining allowance for Christmas gifts, bonuses or to organize a staff Christmas Party. Remember that the tax authorities generally accept expenditure of up to € 2,400 per employee.
The lower VAT rate will be raised from 6% to 9% as of January 1st, 2019. Goods that have already been invoiced and services that will be provided in 2019 will not be charged at the increased rate. If you deliver goods and services that are covered by the lower VAT rate you can make use of this by invoicing before the end of this year.
Maximize your investment allowance with effective planning of your investments. For larger sums, the investment allowance decreases as the amount of your investment increases. For example, an investment of € 100.000 in 2018 delivers a small-scale investment allowance of € 15.863. If you spread this investment over 2018 and 2019 by investing € 50.000 each year, this will deliver a small-scale investment allowance of € 28.000.
Energy saving investments can be eligible for the Energy Saving Allowance. This amounts to 54.5% this year, reducing to 45% next year. This is a good reason to make energy saving investments before the end of this year. The moment at which you enter into any legal obligation in this area determines the moment at which you have the right to request extra deduction.
Did you make a profit in 2017 but are you expecting to close 2018 with a loss? Submit your application for a provisional loss settlement after your income tax or corporation tax return for 2018.
You can then offset 80% of the probable loss with the profits from 2017. Any differences from the declaration will be corrected at the final assessment.
As of 2019, electric cars that cost more than € 50,000 face an additional tax of 22%, provided that the catalog value is above € 50,000. Therefore, if you were thinking of buying an expensive electric car it is wise to do this before the end of 2018. The valuation of the wages in kind of just 4% regarding the car is yours for a maximum of five years.
As an entrepreneur in The Netherlands, are there any financial measures that you can still take this year that are beneficial to your company? How can you already start to plan for changes that will apply in 2019? Here are our top 7 practical tips:
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