Tax news

Tax changes 2006

Ten changes in 2006


20 September 2005

The measures from the government’s reform agenda to be implemented in 2006 and 2007 are summarised below.

  1. With effect from 1 January 2006, there will be a single basic medical insurance scheme for all. The distinction between private and health-fund insurance will disappear. To offset any negative effects on purchasing power, income-related care benefit will be introduced in 2006 and occupancy-related property tax will be abolished.
  2. The new Work and Income (Capacity for Work) Act (WIA) will enter into force in 2006. This will enable a distinction to be made between fully and partially incapacitated people.
  3. The unemployment benefit system will be reformed in 2006. The key feature of the new Unemployment Insurance Act (WW) is that the unemployed will be given maximum incentives to work again. Action will be taken to stop the Act being misused as a route to retirement for older workers.
  4. 2006 will see an end to the tax schemes that made early retirement and pre-pension schemes financially attractive for employees who were under the age of 55 on 1 January 2005. Instead, people will be able to save up for their pre-pensions by means of the life-course savings scheme.
  5. A new civic integration system will be introduced in 2006. The government will use sanctions and financial incentives to encourage newcomers to pass the civic integration examination.
  6. Employers’ salary records will be simplified by combining tax and social insurance contributions.
  7. In 2006, every Dutch person will be given a citizen service number (based on their tax and social insurance number) which they can use for identification and registration purposes when dealing with government bodies.
  8. In 2005, corporation tax was reduced to 31.5%. In 2006 it will be reduced to 29.6%, i.e. by 0.9 of a percentage point more than was agreed.
  9. Local measures to tackle anti-social behaviour and neighbourhood neglect will be given a boost in 2006, as the Urban Areas (Special Measures) Act will enable municipalities to regulate who lives in certain districts and to take stricter measures against rogue landlords.
  10. In 2006, extra money will be allocated for nursing homes and youth care (€ 100 million), public safety and security (€ 50 million), and education (€ 250 million).