Changes in wage tax credits for non-residents in the Netherlands

As of 1 January 2019 a smaller sum in tax credits will be taken into account when calculating the wage tax of non-residents in the Netherlands.

Tax credits

Wage tax and income tax are subject to tax credits, such as employed person's tax credit, elderly person’s tax credit and general tax credit. These tax credits are comprised of a tax component and a social insurance component. Up until 1 January 2019 everyone who is subject to wage tax and to social insurance in the Netherlands received both the tax component and the social insurance component of tax credits.

As of 1 January 2019 non-residents will no longer receive the tax component of tax credits. They will still receive the social insurance component of tax credits if they are subject to social insurance in the Netherlands. This does not apply to the employed person's tax credit. Employed persons who live in a country in the EU or the EEA, Switzerland or the BES islands will also receive the tax component of tax credits.

Taxpayers living abroad who qualify

Taxpayers living abroad who qualify are still entitled to the tax component of tax credits. They can apply for its reimbursement via their income tax declaration.

Taxpayers living abroad who qualified in a previous year, and whose situation is unaltered, can apply for a provisional assessment over 2019. This will enable them to organise the reimbursement of tax credits to which they are entitled but which were not applied when wage tax was deducted.

Residents in Belgium

If you live in Belgium you are entitled to the employed person's tax credit. If you have income from the Netherlands, then you are also entitled to the tax component of the general tax credit. Your employer or benefits agency may already have taken into account the general tax credit in calculating your wage. You can ask your employer or benefits agency whether this is the case.

Did your employer or benefits agency already take into account the tax component of the general tax credit? In that case, it is better that you do not apply for a provisional tax assessment. Otherwise you will receive the tax component of the general tax credit twice: via your pay slip and via your provisional assessment. You will be obliged to repay, via your income tax declaration, any sum that you have received twice.

No automatic provisional assessment over 2019

Due to alterations in tax credits, foreign taxpayers will not receive an automatic provisional assessment over 2019. You can apply for a provisional assessment.

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