On June 4, 2012, the Dutch Government released a tax bill which proposes certain amendments in Dutch tax law to implement proposals for the 2013 budget.
The most important proposed amendments are the following:
- An irrecoverable levy on employers in 2013 in respect of wages paid to high-earning employees in 2012;
- An increase of an existing levy in Dutch wage tax due from employers in case of 'excessive' severance payments;
- The increase of the main VAT rate from 19% to 21% as per October 1, 2012;
It is expected that most proposals, unless indicated otherwise, will take effect as of January 1, 2013.
2013 levy on employers in respect of wages paid to high-earning employees in 2012
The Bill proposes a one-off irrecoverable levy on the employer of 16% of employee earnings in excess of Euro 150,000 in 2012. For the purpose of the levy, the excess wages will be regarded as paid on March 31, 2013. In most cases, this levy will therefore be included in the wage tax return to be filed, and taxes to be remitted in April, 2013. The levy will be a deductible item in determining the employer's own taxable profits for corporation tax or income tax purposes. This proposal will be a one-off measure which will be repealed after 2013.
Increase of existing wage tax on 'excessive' severance payments
The Bill proposes to increase the tax rate of the existing irrecoverable employer's levy on excessive severance payments from 30% to 75%. A severance payment is considered excessive if the employee's annual salary equals at least Euro 531,000 (for the year 2013) while such severance package exceeds a certain 'normalised' annual salary. For purposes of the levy the severance payment is defined as the sum of all payments made during the last preceding two years, in excess of the normalised annual salary.
The increase of the main VAT rate from 19% to 21% as per October 1, 2012
The Bill proposes that supplies of goods and services made on or after October 1, 2012, which are subject to the main VAT rate, will be taxed at 21%. Where a prepayment has been made for such supplies prior to October 1, 2012, on which prepayment the current main VAT rate of 19% was applied, the taxpayer must account for an additional VAT payment of 2% on October 1, 2012. Supplies of goods and services made before October 1, 2012, will be taxed at the current main VAT rate of 19%, even if the payment for those supplies is made on or after that date.
Further proposals due in September will include limiting the deductibility for personal tax purposes of financing costs incurred in respect of the taxpayer’s principal abode, and possible changes to the tax treatment of compensation paid to employees for commuting and the benefit in kind for using a company car.