Tax discounts for foreign tax-payers no longer settled via the salary

Foreign tax-payers who earn 90% or more of their income in the Netherlands have a conditional right to the same fiscal advantages as domestic tax-payers. Among other things, they can obtain all tax reductions.

It is difficult for an employer to ascertain whether an employee fulfils the conditions.

Foreign tax-payers who do not fulfil the conditions for this regulation are entitled to a lower or sometimes no tax reduction at all. As of 1 January 2019, this is changing, according to the plans that were put forward in the King’s speech this year.

Because of the fact that an employer cannot always determine whether an employee qualifies for the scheme, the employer will no longer have to take this regulation into account as of 1 January 2019.

Lower net wages due to incorrect tax reduction

For many foreign tax-payers who do fulfil the conditions, this could mean that they receive lower net wages paid into their accounts as of January 2019. They will then be able to claim the tax rebate once their income tax return has been approved by the Tax Department.

Tax reductions via income tax return

Would you rather not wait until your income tax return has been approved? Then contact your adviser to see if the tax reduction can be paid out earlier. Or ask your questions via international@acconavm.nl.