Dutch Tax Plan 2019

in Tax consultby Hằng Nguyễn

On September 18th 2018, the 2019 Dutch Tax Plan was presented by the Minister of Finance to the lower house of the parliament. Please find the most important measures for expats below.

2019 personal income tax rates (Box 1)
For the year 2019, the following personal income tax rates will apply for Box 1 (income from employment, dwellings and business activities):

Box 1 Income up to Not exceeding Rate
Bracket 1 20,384 36.65%
Bracket 2 20,384 34,300 38.10%
Bracket 3 34,300 68,507 38.10%
Bracket 4 68,507 51,75%

2019 personal income tax rates (Box 2)
The tax rate applicable to income from substantial shareholdings (Box 2) – which is currently 25% – will be increased to 26.25% in 2020 and 26.90% in 2021. For the upcoming years, the rates will be as follows:

Year Rate
2019 25.0%
2020 26.25%
2021 26.9%

Minimum salary criteria 30% ruling
The following minimum salary criteria will apply as per January 2019.

30%-2019 annual annual monthly monthly
regular € 37.743,00  € 53.918,57  € 3.145,25  € 4.493,21
master € 28.690,00  € 40.985,71  € 2.390,83  € 3.415,48

Tax credit for non-resident taxpayers
Non-qualifying non-resident taxpayers who are resident in an EU member state, the EEA, Switzerland or the Caribbean Netherlands will be given the statutory right to the tax portion of the employed person’s tax credit and the income-related combination tax credit. The same applies, in principle, to non-resident taxpayers who operate a company via a permanent establishment in the Netherlands. The amount of the tax portion of the employed person’s tax credit and the income-related combination tax credit will be based on the worldwide employment income.

Increase of reduced VAT-rate
As from January 1 st 2019, the reduced VAT-rate will be increased from 6% to 9%. This increase should be viewed in coherence with the propositions which effectively lower Dutch taxation on income. There is no transitional legislation in place for this tax rate increase.

Depreciation of buildings
As of 2019 or financial year starting in 2019 the proposed changes may result in a limitation of depreciation of a building which is used by the taxpayer itself or an affiliated company (‘building in own use’) for corporate income tax purposes. Currently the depreciation of a building in own use is 50% of the official property’s fair market value for tax purposes (‘WOZ-value’). In the proposal the depreciation is only limited to a book value of 100% of the WOZ-value. Therefore the possibility to postpone taxation is further limited. There are no changes with respect to the personal income tax, whereby a building in own use can still be depreciated up to 50% of the WOZ value.


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