Payroll tax changes 2019

The first of January 2019 has witnessed a number of changes being made to the payroll tax regime, as follows.

Private use of company car

Any employee whose company car comes with a private use privilege will inevitably see his or her salary augmented in the amount of a particular percentage of the car’s list price inclusive of value-added tax, at a level which is dictated by the vehicle’s carbon dioxide emission value in conjunction with its date of first registration (admission to the public highway). The 2019 addition for newly admitted zero-emission vehicles has been lowered to four percent for the first 50,000 euros of the relevant vehicle’s list price, with the regular 22 percent rate applying to the excess list price if any (as it would in all other scenarios).

A variety of reduced rates used to apply up to year-end 2016, the corresponding term of validity being capped at 60 months each. Cars that were first registered in the Netherlands prior to 2017 to which such a reduced rate applies will come under the erstwhile 25 percent addition regime (rather than the regular 22 percent rate as we now know it) as soon as the 60 month term has expired. The 2019 addition for zero-emission cars predating 2017 whose 60-month term has expired has been reduced to seven percent for the first 50,000 euros of the relevant list price, with the erstwhile 25 percent rate applying to the excess list price if any.

30 percent ruling

The “30 percent ruling” regime for inbound employees who boast expertise that is thin on the ground in the Dutch labour market grants access to a tax allowance in the equivalent amount of 30 percent of gross salary having liability for Dutch payroll tax (conditional, it should be noted, to the employee in question meeting the scheme’s requirements). A salary standard is used to confirm that the employee in question does indeed boast the requisite expertise, the level of which has been fixed at 37,743 euros for 2019, or 28,690 euros for employees under the age of 30 who have completed their master’s degree.

A (reduced) five-year maximum has applied to the overall term of the “30 percent ruling” scheme since the first of January of this year, and will likewise apply to existing cases from 2021 onwards. The maximum term used to total eight years from 2012 to 2018 inclusive, compared with ten years until year-end 2011.

Tax allowance for volunteers

The tax allowance for those who are involved in volunteer work throughout 2019 has been capped at 170 euros monthly, to a total of 1,700 euros annually.

Parental leave

Any employee whose partner has just given birth is entitled to five (working) days’ paid parental leave, to be taken instantly or at any time during the first four weeks of the birth.

Dutch version: Wijzigingen loonbelasting 2019