Last updated: 18-09-2008

Netherlands - 2009 budget proposal

18 September 2008
 
The Tax Plan for 2009 was presented by the Ministry of Finance on 16 September 2008.
The Government has withdrawn its planned increase of the standard VAT rate from 19% to 20%.
The planned abolition of the employee's contribution to the unemployment social security will continue as planned. Further, employees that continue working after reaching the age of 62 will be entitled to a bonus of up to EUR 3,000.
For small and medium-sized businesses, a larger part of the profits will be exempt from tax. Further, the relief for new enterprises (startersaftrek) will be increased.
Further tax measures include:

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The broadening of the research and development incentive scheme to include innovative IT projects.
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The ceiling for the deduction of annuity premiums will be substantially higher in 2009 to enable taxpayers to save more for a supplementary pension.
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The parental leave tax credit for working parents will be raised because entitlement to parental leave is being extended from 13 to 26 weeks.
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The eligibility for the parental leave tax credit no longer depends on participation in the life-course savings scheme.
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The tax credit for working parents will be increased.
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Sports clubs will no longer be required to pay gift or inheritance tax.

With respect to the environment, the budget contains the following measures:

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Changing the basis of car and motorcycle tax from list price to CO2 emissions.
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Abolishing the motor vehicle tax rate for highly fuel-efficient cars.
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Cutting the motor vehicle tax rate for cars running on natural gas.
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The introduction of a tax exemption for hydrogen.
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Introducing a second lower rate for notional income percentage of 20% for fuel-efficient cars.

The budget also aims at certain simplifications in the tax and social security systems, such as:

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The requirement to register all new employees with the Tax and Customs Administration before they start work will be abolished.
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The definitions of terms that have proved unclear in practice (e.g. what is treated as "salary") will be simplified.
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The division of annuities, the surrender of small annuities, the withholding of salaries tax on lump-sum payments and the obligation to pay tax on certain forms of annuity (where premiums were not deductible and only the interest component in the annuity payments is taxable) on emigration will be simplified.
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The threshold for quarterly VAT returns will be increased from EUR 7,000 to EUR 15,000. It is estimated that as a consequence around 50,000 businesses will only need to submit returns four times per year instead of twelve times.
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The Declaration of Employment Status will be automatically renewed after three years provided circumstances have remained unchanged.
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Packaging tax will be greatly simplified. The number of different tax rates under this tax will be reduced from 16 to 8.
 

Source: Report from Bart Kosters, IBFD Team Manager Topicals Knowledge Group

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