New laws for businesses and Expats that come into effect in 2022

Between Prinjesdag and the New Year, the Dutch parliament is working to implement hundreds of new laws, regulations, updates to current laws/regulations, etc. Understandably, the majority of news around these topics are communicated in Dutch.

This year, we looked through all of the new laws and regulations that come into effect this year and curated a list of the most relevant for our partners and expat network. You can read more about the tax plan for 2022 (in English!) from the Dutch government here. This article was last updated January 13^th, 2022.  

What businesses need to know

1. Employers can provide a tax-free reimbursement of 2 euros per day to employees wholly or partially working from home.
2. Regulations determining a worker’s eligibility to participate with their employer’s worker’s council have been reduced. Workers can participate in votes after three months of employment, and someone can be elected after six months of employment. Rules vary for temporary workers.
3. Workers may be eligible for a training and development budget of up to 1000 euros if they were not eligible for courses from their employer.
4. The workplace smoking ban that previously only applied to certain business sectors (such as hospitality) has been expanded to include every workplace from every business sector.
5. A residential address of entrepreneurs and company directors is currently required to register their business with the Chamber of Commerce. As of this year, this information will only be visible to tax authorities, attorneys, and debt collectors.
6. Applicable for companies with BV or NV entities: Women must make up at least one-third of management board members and supervisory board members.
7. The lower corporate income tax bracket now applies to companies earnings of up to 395,000 euros, an increase from 245,000 euros. The first tax bracket remains 15 percent. Earnings over the lower limit will be taxed at 25.8 percent, up from 25 percent.
8. The Environmental Investment Allowance (MIA), increases significantly. A percentage of the cost of qualifying investments will be deductible from income tax and corporate income tax.
9. Fishing companies will be required to recover at least 23 percent of fishing gear waste to reduce total plastic litter.
10. Companies are allowed to use prepaid dividend tax overages and prepaid gambling games tax overages against corporate income tax owed.
11. Multinational companies will be able to offset 100 percent of the first million euros in losses against their profits, and 50 percent of losses above that amount.
12. Multinational companies will be restricted in the amount of time in which they can carry over and apply losses.
13. Companies will be allowed to deduct 20 percent of payable interest against profits.
14. Multinational companies will face limitations in how they can deduct payments made in one country from pre-tax profits in another.

Changes in daily expat life

1. The Civic Integration Act has been changed in a significant way. Municipalities will assume more responsibility in guiding new immigrants and their families through the integration process. New residents will be required to learn Dutch up to a B1 level within three years of their residency. There are 3 options to achieve this, either through language courses, (for students) as a part of education, or self-learning. New residents will also need to fulfil a Dutch society participation obligation (participarteverklaring), within 3 years if you moved to the Netherlands from January 01, 2022 or later.
2. Municipalities may now be allowed to enact laws that require home purchases to live in their homes, as opposed to renting them out as investment properties.
3. The self-employed workers tax deduction has been reduced to 6,310 euros. The plan is for this tax deduction to decline annually, until is reaches 3,240 euros in the year 2036.
4. Municipalities are now responsible for registering everyone without a home address, or providing a valid mailing address for those without one.
5. Several traffic violations now carry a larger fine. For example, the fine for using a handheld phone while driving will rise to 350 euros.

Changes that impact compensation

6. The minimum wage has increased by almost 1.5 percent. The actual rate in which your salary will increase varies based on several factors. Read more about these factors here.
7. Employers can provide a tax-free reimbursement of 2 euros per day to employees wholly or partially working from home.
8. The official pension age for AOW will increase by three months: From 66 years and 4 months to 66 years and 7 months. Read more about the pension system in the Netherlands here.
9. Several benefits payouts, such as the AOW pension, will be adjusted in line with the minimum wage increase. All the benefits payouts are listed here (in Dutch).
10. The maximum amount of transition payment laid-off workers are allowed to receive is now 86000 euros. However, laid-off employees who gross above that amount will be able to receive a maximum of 1 year’s annual salary. Read more about transition payments here.
11. The tax credit for workers has risen by a maximum of 212 euros for anyone earning between 36,649 and 109,345 euros.

Relevant for your tax return

1. The general tax credit has increased by roughly 1.5 percent for many earning a maximum of 69,398 euros annually.
2. The basic income tax rate was reduced to 37.07 percent for everyone earning up to a maximum of 69,398 euros per year.
3. Tax deductions for mortgage interest, personal situations like alimony and healthcare, and other costs are now capped at a maximum of 40 percent.
4. The Box 3 assets tax allow for a tax free allowance of 50,650 euros, or a maximum of 101,300 euros for those with a tax partner.
5. The IACK tax deduction for families with dependents has been reduced by up to 281 euros to a maximum of 2,534 euros.
6. The IACK tax deduction is no longer applicable to families with at least one dependent, and where one adult partner lives abroad.

Stay up-to-date on the latest regulations in 2022

We are an expert team of HR and payroll professionals who help businesses form innovative solutions where compliance is the priority. Stay connected with Octagon Professionals to stay informed of the latest, relevant business and HR topics. If your business needs support ensuring your HR and payroll operations are compliant with these new regulations, send us a message today!