Edition 31 January, by Phoebe Potter
Work and income
In the field of work and income, most of the changes coming in for 2020 are small tweaks to the existing system, generally strengthening the position of workers. The minimum wage has increased from around €9.54 to €10.60 per hour (dependent on the collective labour agreement of the relevant industry), as have the maximum benefits that can be claimed.
A more significant change has been made to the tax system, which has moved from a three-tier to a two-tier system. As such, there will only be one tax rate for all incomes up to €68,507 (37.35%) and one for all incomes above that amount (49.5%). The further strengthening of workers’ rights will be welcomed by many. Payrollers will now be guaranteed the same conditions of employment as full-time workers – benefits such as a 13th month and leave entitlements. For on-call workers, employers must now inform them of their working hours at least four days in advance. The legal position of civil servants has also changed, in order to bring their rights and obligations closer in line with those in the private sector.
Care and health
For involuntary care, two new laws have come into force. The first is the mental health act, which regulates the rights of people subjected to coerced mental health care. The most important change is that coerced care can now also be provided outside of a mental healthcare institution. There have also been slight changes to the care and coercion act which regulates the rights of people with an intellectual disability or psychogeriatric disorder. These rights used to be covered by the BOPZ, which was primarily aimed at psychiatric treatments in psychiatric hospitals, but has now been regulated in the Care and Coercion Act. This better arranges care for people with dementia or an intellectual disability, so that those who are unable to express their will are best protected.
There have been small increases in the maximum healthcare allowances for both single people and couples; medical records can now be kept for five years longer than previously. The basic package of health insurance has been slightly expanded including improvements for those needing a specialist in geriatric medicine and for the mentally disabled, as well as for those needing diabetes treatments.
Perhaps one of the most noticeable public health shakeups is an increase in the excise duty for cigarettes – the price of a pack of 20 will rise by €1 in April.
For families, some small changes will come into effect in 2020. The childcare allowance has increased – you can calculate the amount you are eligible for on the website toeslagen.nl. Alimony rules have also changed: previously the highest-earning partner had to pay twelve years of maintenance to their ex-partner, but this is now reduced to five. As usual, child support has been raised this year – now to 2.5%.
Traffic and transport
The number of environmental zones has increased, as municipalities are now able to introduce yellow and green environmental zones for diesel vehicles. The amount of pollutants your diesel car emits determines whether you can enter the zone, shown by a number on the traffic sign. In other environmental progress, a ‘microdust surcharge’ of 15% is introduced for owners of older diesel cars. Tax breaks for electric cars will continue to exist until at least 2025, so you pay no motor vehicle tax or purchase tax. In other transport changes, for serious traffic offences the sanctions become higher, with maximum penalties up from 2 to 6 months in prison, even if there was no injury or damage.
Education and culture
Only minor changes have yet been announced in the education and culture fields. VAT on e-books has decreased from 21% down to 9%, bringing it into line with the VAT on paper newspapers, magazines and books.
A proposed compulsory membership of public service broadcasters has been postponed until next year. The reason for this is that the approval process of public service broadcasters has also been extended for an extra year.
For those with mortgages, small changes have been made. People with an income of over €68,507 will see their mortgage interest deduction decrease from 49% to 46%. For those wanting to buy their house through the National Mortgage Guarantee (NHG) system, it’s good news if you go green: if you invest in energy-saving measures, then the NHG cost limit rises to a maximum of €328,600.
For renters, the maximum increase in rent applying to social rental properties is now 5.1% or 6.6% depending on your income. If you’re renting in the free sector, then there is no maximum to rent increases. Whether you are living in a social rental property or a free sector property is determined by the rent liberalisation limit. Paying less than €737.14 per month? Then you are renting in the social renting sector; pay more and you are in the free sector.
Energy tax changes being brought in spell savings for many, with most households set to pay €100 less tax on average. Tax on natural gas is gradually increasing, whilst tax on electricity is going down. For those with pellet stoves and biomass boilers the subsidy has ceased to apply from 1 January 2020.
Few changes have occurred for state pension (AOW) and private pensions, as the retirement age remains the same at 66 years and 4 months.
Government and safety
Far more of a matter of principle than practice, conscription service has begun for women. Women who turn 17 from 2020 onwards will receive a letter from the government stating that they have been enrolled in compulsory military service. In practice, however, though conscription still technically exists in the Netherlands, the Ministry of Defence has not called up new conscripts since 1996.
There are rises in passport and identity card costs: passports now cost a maximum of €73.23 (for over-18s) or €55.37 (under-18s). Identity cards now cost a maximum of €58.31 for people over 18 and €30.37 for under-18s.
In a strengthening of rights, ‘revenge porn’ has now become punishable by an imprisonment of up to 2 years. This includes, for example, the disclosure of sexual or other explicit images that can be detrimental to the victim.
Another change has been made to the collective rights of citizens, which allows groups of citizens and companies that have suffered damage to go to court to get compensation. This so-called ‘mass damage’ relates to things such as faulty usury policies or cars that have been fiddled with.
Business and work
Help for farmers and horticulturists who are just starting out has come into place, in the shape of an additional financing option to help starting farmers or gardeners take the step to a sustainable and future-proof business. This scheme, called the ‘Asset Reinforcement Credit Guarantee Scheme’, makes it easier for people to apply for a loan based on future-oriented business plans. Farmers who insure themselves against damage to crops caused by extreme weather no longer have to pay a 21% insurance tax on this.
Help has also arrived for small businesses. If you have a business with an annual turnover of less than €20,000, you will now be exempt from the quarterly turnover tax. Sole traders will have a little extra admin to take care of, as from 1 January they must state a new VAT identification number on invoices and their website. This change was long overdue, as the previous number was based on the individual’s social security number, which raised privacy concerns.
If you are 55 or over and have a non-viable business (with a gross income averaging at least €8,068 per financial year) you can now apply for benefits or working capital via the decree on assistance to self-employed persons. Self-employed entrepreneurs just starting out can apply for working capital on the basis of the decree on assistance to the self-employed.
The labour costs scheme for tax-free allowance has been extended this year. This means that employers can give employees up to €2,000 more in tax-free allowances.
Unlike in previous years, the high corporate tax rate has not been reduced, remaining at 25%. Finally, from 2020, Dutch companies will have to pay waste tax if they burn waste from abroad, which was previously not taxed.