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Netherlands

More taxes in 2013

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Yes it is true, also here in the Netherlands the taxes have raised and some benefits cut off. I already knew this was going to happend but i only went to look for the changes when this January i received less €37 euros in my salary.

People from outside the Netherlands think that here the crisis did not touch but that is  not true, they also have deficits, more unemployment, they are also nationalising banks and cutting on peoples pensions . Already in 2012 i felt some benefits cut off where i have to pay almost every medical bill because the insurances do not cover it anymore.

So this is what changed on taxes and benefits in 2013:

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For private individuals it concerns the mortgage interest relief and the tax-free payments for a travel allowance of the employer. The tax measures still have to be approved in both Houses of Parliament and it is also possible that the new government will introduce certain changes. Nevertheless, budged cuts need to be implemented in order to reduce the budget deficit. We believe there is a great chance the proposed (savings) measures will be approved.

Mortgage interest

New mortgages

These new rules state that you will only receive interest relief for an annuity or straight-line mortgage. You must actually pay off the mortgage in order to be able to deduct the interest.

Existing mortgages

For current home (and mortgage) owners the good news is that the changes do not refer to existing cases. If the mortgage is concluded before 1 January 2013, you will not be affected by the new rules.

Also, if you “switch” a mortgage, the current rules will continue to apply. If you buy a new house and need a higher mortgage, the new rules will only apply to the higher mortgage.

Savings and investment mortgages

In the past, mortgages were concluded in combination with a savings account or insurance-linked savings scheme in order to maximise the tax advantage.

Besides the maximum mortgage, people save in order to be able to (partially) pay the mortgage in due course. If such a mortgage is concluded before 1 January 2013, the interest relief will be retained and you do not have to pay an investment yield tax of 1.2% on the balance of the savings account / insurance-linked savings scheme.

Transfer tax

The transfer tax is also important for the housing market. When a person resells a house within 36 months he can reclaim the previously paid transfer tax from the tax authorities. Before 1 September this period was six months. It is a temporary measure that will last until 2015. The measure is an encouragement for private individuals who have to sell their house quickly, for example when they have to move because of a divorce or a different job, or when private individuals have bought an existing house, but want to move on to a new house. The transfer tax has been reduced to 2% since 2012.

Travel allowance

Commuter tax

Another major change is taxing the travel allowance, which was tax-free until now. In the media this tax is also called “commuter tax”. Many parties oppose this measure and it is not inconceivable that this measure will still be changed some time in the future.

Public transport

Allowances for public transport season tickets are currently tax-free for the employee, but after 1 January 2013 they will be taxed. If you have an annual season ticket and it was purchased before 25 May 2012, this allowance will remain unaffected in 2013.

Business kilometres

As from 1 January 2013 commuter kilometres will not be considered as business kilometres anymore. This means that the employer cannot compensate these kilometres anymore tax-free up to a maximum of EUR 0.19 per kilometre. Business kilometres by car for a work meeting can still be compensated tax-free.

Lease car

This measure may also have major consequences for employees with a lease car. After all, up to a maximum of 500 kilometres per year the employee does not have an addition for the private use of a company lease car. However, now that commuter kilometres will be considered as private kilometres, the employee will soon exceed the 500 kilometres for private use of the lease car, and a substantial extra tax amount will have to be paid. For lease drivers there will be a transitional arrangement. If the lease contract was concluded before 25 May 2012, and the lease driver is confronted with a higher tax as a result of this measure, the lease driver may take 25% of the normal car addition as a basis.

Income tax rates

A substantial increase is announced for the first tax bracket, which is applicable for income up till € 19,645. The tax rate in the first bracket shall be increased by 3.9%. The rates in the other brackets will remain the same.

This are not all measures, to see them all go to this LINK and LINK2. Use google chrome so it can translate the page because it is only in Dutch.

More information about coming to the Netherlands and taxes in English go to this pages:

EXPATAX – Tax, legal and accounting

EXPATICA – General info about Netherlands

HOLLANDEXPATCENTER – Info por expats.

Thank you and till next time.

Sérgio

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