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The Latest News on Tax Plan, Brexit Deal, Immigration Law and Labor Law

the Netherlands

Tax Plan 2020 – Personal Income Tax and Wage Tax in The Netherlands

On 17 September 2019, the Tax Plan 2020 and several accompanying legislative proposals (hereafter collectively referred to as “the Tax Plan”), were presented by the Minister of Finance to the lower house of the parliament.

Income Tax

  • With effect from 1 January 2020, the number of income tax brackets will be reduced from four to two for taxpayers who pay all the social security contributions (i.e. who have not yet retired).

The brackets and rates will be as follows:

For individuals born after 1 January 1946

bracket (EUR)rate (%)
up to 68,50737.35
up to 20,711
20,711 – 35,375
35,375 – 68,507
over 68,50749.5

For individuals born before 1 January 1946

bracket (EUR)rate (%)
up to 68,507
up to 20,71119.45
20,711 – 35,37519.45
35,375 – 68,50737.35
over 68,50749.5
  • The change from four to two brackets was originally planned for 2021. The government, however, decided to bring it forward by 1 year.
  • The tax credits for 2020 will be as follows:
Credit2020 (EUR)2019 (EUR)
general levy rebateup to 2,711up to 2,477
general levy rebate (retired individuals)up to 1,413up to 1,268
employment creditup to 3,819up to 3,399
employment credit (retired individuals)up to 1,989up to 1,745
income-dependent combination creditup to 2,881up to 2,835
old age credit up to 1,622up to 1,596
young disabled credit749737
  • The entrepreneur’s allowance (ondernemersaftrek), a fixed deduction of EUR 7,280 (for 2019) available to all qualifying entrepreneurs, will be gradually reduced to EUR 5,000 in 2028. This will be effected through eight annual increments of EUR 250 and one increment of EUR 280. For 2020, the deduction will therefore be EUR 7,030.

The Tax Plan also proposes to abolish the allowance for staff training costs (scholingsaftrek). This allowance is currently capped at EUR 15,000, with a EUR 250 threshold. The allowance will be replaced by a non-tax-related subsidy: the Subsidieregeling STAP-budget (Stimulans van de Arbeidsmarktpositie). The allowance for staff training costs will be abolished once the new subsidy takes effect.

Wage tax

  • The work-related expenses scheme (werkkostenregeling) provides that an employer may grant a tax-free general employment cost compensation of 1.2% of the employee’s gross salary. Any excess is taxable at a rate of 80%.

Under the Tax Plan, with effect from 1 January 2020, the percentage of 1.2% will be increased to 1.7%, but only for the first EUR 400,000 of the total fiscal wages (totale fiscale loonsom) of all the employees. Above that amount, the percentage will be unchanged at 1.2%.

  • The taxable benefit of a fully electric company car will be increased from the current 4% (on the first EUR 50,000 of the car’s list price) to 8% (on the first EUR 45,000) from 2020.

The taxable benefit will be increased in stages until it reaches the standard rate of 22% on 1 January 2026. The cap of EUR 45,000 will be reduced further to EUR 40,000 in 2021 and remain at that level until 1 January 2026 when it will cease to exist.


UK; Brexit

UK can get Brexit deal and leave by Oct. 31 – junior minister

“I am confident we can get a deal” – junior Brexit minister Kwasi Kwarteng

Britain and the European Union have moved a lot in the seven weeks that Prime Minister Boris Johnson has been in office and the two sides can still agree a deal to secure Brexit by Oct. 31, junior Brexit minister Kwasi Kwarteng said on Friday.

“We’ve moved a long way in seven weeks and what we’ve heard over the last seven weeks is considerable movement on the part of the EU on this question of the Withdrawal Agreement and particularly on the backstop.”

“I am confident we can get a deal. I am also confident that we can get this deal through the House of Commons and leave on the 31st of October.”

Read more on www.lse.co.uk


USA

Lawmakers want California to ignore Immigration Laws in USA

Such a ban is a dangerous and harmful move that wouldn’t succeed in stopping the detention of illegal immigrants

Driven by Trump Derangement Syndrome, the Democratic-controlled far-left California Legislature is determined to stop the Trump administration from enforcing immigration laws enacted by Congress and past presidents. By doing this, the Legislature is effectively making the absurd claim that it has the power to ignore federal law.

The California Legislature’s latest effort would eventually ban the federal Immigration and Customs Enforcement agency (ICE) from housing illegal immigrants in privately operated prisons in California.

Such a ban is a dangerous and harmful move that wouldn’t succeed in stopping the detention of illegal immigrants. It would simply raise detention costs for U.S. taxpayers and result in illegal immigrants being held under worse conditions. So instead of helping illegal immigrants – as California Democrats claim they want to do – their legislation would actually hurt the migrants.

The California State Assembly gave legislation imposing the ban on housing illegal immigrants in private prisons final legislative approval last week. It sent the measure to Democratic Gov. Gavin Newsom, who has voiced support for phasing out the use of private prisons. He has until Oct. 13 to sign or veto the bill.

Read more on www.foxnews.com


UAE

UAE Steps Up Enforcement of Preferential Hiring for Nationals

​The United Arab Emirates (UAE) Ministry of Human Resources and Emiratisation (MOHRE) has begun implementing a more stringent application of its existing UAE Labor Law market testing process, with the goal of prioritizing the hiring of nationals. Now the program has expanded to encompass all companies in the UAE, which means businesses need to adjust their hiring practices.

Sinan Yurtsever came to work for a global consulting company in Dubai, UAE, in 2018, arriving from Istanbul as a highly qualified foreign consultant. He’s thriving in the company’s international environment. 

“In my company, the makeup is 50 percent Indian, Pakistani and Bengali, plus there are some Emiratis and the rest is mostly Europeans,” Yurtsever said. “Compared to other companies, my company is more diverse. In other companies, there are lots of people from the Middle East: Lebanese, Jordanian, Egyptian.” He is enjoying his job and his company and finds that his overall quality of life has improved over his time in Istanbul. “My work/life balance is good and the work culture is a little more international, and the main language is English. It’s an international environment.” 

This kind of international composition of the workforce isn’t unusual in a city where Emiratis make up only 15 percent of the population. However, with the nationwide push for preferential hiring of UAE nationals, a consultant like Yurtsever now could be hired only if a qualified Emirati wasn’t vying for the position.

Read more on www.shrm.org


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Global HR & Mobility Market Updates

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– The British Abroad to Lose Emergency Health Insurance
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– H1-B applicants can apply for visa 3 months ahead of starting new job

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Death and taxes: Importance of Expat Wills

In this article we cover some of the basic considerations for international expat estate planning. This however is no substitute for seeking professional legal advice and tax consultancy so that wills are tailored to the individual’s unique situation.

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