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Recently we moved from our old office to a new and bigger office in the same building. With more space available we can serve our clients in a more convenient way.
I will be in The Hague at least every Friday. So if you would like to meet me there I can fill in your tax return immediately (when I have all the required documents) and you can ask me your questions in person.
The economic tide is not very good at the moment. Because of the falling consumer trust a lot of companies have to close their offices worldwide. The Netherlands is not an exemption.
When you are made redundant you will (most of the time) receive a redundancy package which consist of several monthly salaries in one amount. The longer you worked for the company the higher the payment will/should be.
The so called kantonrechtersformule, a formula created by the combined judges, calculates the possible amount of the redundancy package.
When you get a redundancy package you can choose out of three options:
1. Payment in one lumpsum to your bankaccount
2. Income insurance from an insurance company
3. Income insurance from your own limited company
What are the benefits of each option related to taxation?
The current cabinet decided when they started their term that a couple of tax benefits would be ended. One of them are the employee savings.
A lot of employees save part of their salary every month using the so called "spaarloon" or "premiesparen". With spaarloon a part of your gross salary becomes net when it is blocked on a special account for at least four years. With premiesparen part of your net salary can be doubled tax free by your employer when both amounts are also blocked on a special account for at least 4 years. For certain purposes like buying a house or a pension this blocked amount could be unblocked within those four years without losing the tax benefits. Many employees decided to combine this tax friendly way of receiving salary and saving it with for example a tax deductible pension insurance.
The cabinet decided to end all this because they couldn't afford the tax benefits anymore. This means many people will now have to pay the premiums for their pension insurance out of their normal salary.
But the decision may be changed. Because of the fall of the cabinet everything is open again. Although premiesparen will be ended, the spaarloon may stay. Plans are now to reduce the maximum yearly amount of Euro 788 to Euro 470. But as we all know, promises from the government can be taken back anytime, so let's wait and see.
AOW-premium (social security for 65+)
|ANW-premium (social security for the next of kin)||1,25||1,25|
|AWBZ-premium (special health costs)||12,05||10,25|
|Premium standard social security||31,20||29,40|
|Tax rate first scale||1,70||2,95|
|Tax rate second scale||6,75||8,45|
|Combined rate first scale||32,90||32,35|
|Combined rate second scale||37,95||37,85|
Combined rate first scale 65+
|Combined rate second scale 65||20,05||19,95|
|Tax rate third scale||42,00||42,00|
|Tax rate fourth scale||52,00||52,00|
Do you have a pensiongap? Would you like to get back some of the tax you paid in 2001? Are you staying in the Netherlands for the long term?
If so, you can reduce your pensiongap and your taxable income by saving for your pension with a so called "lijfrenteverzekering". This is an insurance for which you pay premium every year (which may be deductible) and starts paying at the age of 65 as long as you live.
By changing employers or by moving from country to country you may have created a pensiongap. If you would like to have enough income when you retire you have to take action yourself and use one of the few existing tax deductions. Premium paid before 31 December 2002 can still be deducted from your taxable income over 2001.
When you received a - full taxed - redundancy package in the past you can use (part of) it to get at least some of the tax back.
Donations to charity organisations (Red Cross, church, WNF etc) situated in the Netherlands may lead to a tax benefit. Donations can be (partly) deductible when the total amount lies between 1% and 10% of your shared income.
When you and your collegues or friends have a lot of questions about taxation, retirement, insurance, mortgages, investment etc especially related to expats we are always prepared to arrange a meeting in which we can explain the possibilities for expats in the Netherlands.
The meeting can take place at our office, your office or at a location somewhere else. Feel free to contact us with your wishes.
The past couple of months we could again help a lot of expats getting a mortgage. By buying a property you could in fact most of the time be better of financially than when you are renting. Because of the deductible interest net monthly terms are often lower than the rent which had to be paid in the past. Interest on a mortgage are still low, so why not find out if you can get a mortgage?
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This was the fourth newsletter in 2002. If you have any questions or suggestions please let me know.