Shortening maximum duration of 30% facility
The 30% facility offers employers the option to, under certain conditions, give employees who temporarily work outside their country of origin an untaxed flat-rate remuneration instead of reimbursement of the actual additional (territorial) costs of such employees. As from 1 January 2019, the duration of the 30% facility for employees from abroad is reduced from eight (8) to five (5) years, for which no transitional law has been provided. The shortened term applies both for new as well as existing cases, so that the 30% facility can no longer be applied after five (5) years at the latest.
Please note!
There will, however, be a restricted transitional law for the untaxed reimbursement of school fees for international schools. These may be reimbursed untaxed for the school year 2018/2019, even after shortening the duration of the 30% facility, provided that reimbursement takes place within the original duration.
Tax credit for foreign employee
Under current legislation, tax credits granted via payroll tax for a group of foreign taxpayers are higher than the tax credits to which they are entitled regarding income tax. They must then pay the excess amount offset via income tax.
Hence it is proposed to apply to non-resident taxpayers:
- who live in the EU/EEA/Switzerland/BES Islands;
- or who reside outside the EU/EEA/Switzerland/BES islands and run a business with the help of a permanent establishment in the Netherlands, and on whom a tax treaty is applicable which prohibits discrimination against permanent establishments, only the tax part of the employed person’s tax credit and of the income-dependent combination tax credit.
Increased tax exemption limit for volunteers
For persons working as a volunteer, organisations are not required to withhold any tax and national insurance contributions on remunerations and allowances which the volunteer receives if this amount totals a maximum of € 150 per month and € 1,500 per calendar year. As of 1 January 2019, these ceilings have been increased to € 170 per month and € 1,700 per calendar year.
Please note!
The amounts used in tax exemption for volunteers must be regarded, at most, as covering the costs incurred by a volunteer for his voluntary work.
