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Changes in the Dutch tax system as from 1/1/2015

This article was written by Ilse Van Hove.
Contact us for more info at contact@vandelanotte.be.
On 1 January 2015 a number of significant tax changes have been implemented in the Netherlands that will have an impact on Belgian residents working in the Netherlands. Below you will find a summary of some of these changes.  

 Regulations for qualification foreign taxpayer  

The current regulation where you could choose, has been replaced by a new regulation for qualification foreign taxpayer where Belgian residents can opt for the same treatment as Dutch taxpayers and thus also qualify for the Dutch personal benefits as they apply to Dutch taxpayers.  

For this qualification, foreign taxpayers must meet certain new conditions. The taxpayers' income must be subject to Dutch income tax for at least 90% and foreign taxpayers must submit a declaration of income issued by the tax authority of their country of residence.   The impact of these new conditions must not be underestimated. For instance, Belgian residents who are benefiting from the Dutch mortgage interest deduction must now meet the stringent 90% condition in order to keep enjoying this tax benefit. The requirements are to be considered per partner.     

Dutch tax rate increase  

 Since  2015 the income tax rates have gone up. As from 1 January 2015, the tax rate in the first two tax brackets have gone up to 8.35% (2014: 5.1%) and 13.85% (2014: 10.85%) respectively.  

These tax rate increases will mainly impact on Belgian residents who are subject to taxes in the Netherlands because of their professional activities but who remain subject to the Belgian social security system. More specifically, it will have an impact on Belgian residents in a salary split structure and employees posted to the Netherlands.  

For employees working in the Netherlands and subject to social security in the Netherlands, this increase will be compensated by a 3% decrease of the "premie volksverzekering" rate (i.e. the  Dutch social security contributions). For Dutch employees it is a shift with little impact on the actual tax burden.   Belgian residents subject to Dutch taxes but with Belgian social security contributions will, however, not enjoy this compensation which will lead to a tax burden increase.  

 The salary split structure is attractive to limit tax progression because the taxpayer is able to enjoy the lowest tax brackets in two or more countries. Persons who find themselves in this structure will see the interesting low tax rates go up in the Netherlands in 2015.  

 Employers of posted employees will have to deal with a higher labour cost.    

The 150km condition under discussion  

The Court of Justice has decided on 24 February 2015 that the 150 km criterion of the 30% ruling is in principle not incompatible with European legislation.   On 1 January 2012, the conditions for the 30% ruling were tightened. Since the introduction of the 150km condition for the 30% ruling in the Netherlands, several court cases have been initiated to challenge this condition. Since Belgium is almost entirely located within the 150 km limit of the Netherlands, very few Belgian residents qualify for the 30% ruling.  

A Dutch court has decided that this condition was discriminatory but the Court of Justice has now rejected this decision. This decision, however, does not yet solve everything. The Court has given the Hoge Raad der Nederlanden (Dutch Supreme Court) the task to decide whether the scope of the 30% ruling is wider than the actual extra-territorial costs. If so, according to the Court of Justice, the rule is incompatible with EU law. It is not clear when the Hoge Raad der Nederlanden will take this decision.

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