Payroll: changes in 2019

Decree 2019 from the Dutch Tax Authorities

Every year the Dutch Tax Authorities sends the decree with the “WHK”% for 2019 at the end of November.

 

Changes in payroll tax tables 2019

As you may already have heard there will be a change in the payroll tax tables by 2019. Now we have 2 payroll tax tables. A white table is for payments in present employment and the green table for payments in previous employment. There will be 3 white tax tables and 3 green tax tables.

Up till now each employee is entitled to the tax part of the tax credits. This will change on January 1st 2019. Then the tax part of payroll tax credits will only be applicable to residents of the Netherlands.

There is 1 exception. The tax share of the labour discount also continues to apply for the employees who are resident of another member state of the European Union  or Iceland, Norway, Liechtenstein, Switzerland, Bonaire, St. Eustatius or Saba.

 In order to process the new rules correctly in the wage tax return, a large number of additional payroll tax tables will be added by 2019. In the wage tax tables, a distinction is made between three groups of employees:

· Employees who are residents of the Netherlands;

· Employees who are residents of another member state of the European Union or Iceland, Norway, Liechtenstein,   Switzerland, Bonaire, Sint Eustatius or Saba;

· Employees who are residents of another country than those mentioned above.

How do you determine which country an employee is a resident of ?

You determine this based on the facts and circumstances that are known:  for example, the place of residence that the employee has provided to you as one of the data for the payroll taxes, travel expenses you pay and data for the assessment of the insurance obligation. In most cases you will be able to determine in this way which country the employee is a resident of.

In case you have any doubts, you can ask your employee to provide a residence statement. This ensures which country the employee resides to. The employee can get a residence statement at the tax office. This can also be abroad.