Outline Agreement

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EY Netherlands

24 May 2024
Subject Tax updates
Categories Tax

The PVV (Party for Freedom), VVD (People’s Party for Freedom and Democracy), NSC (New Social Contract) and BBB (Farmer Citizen Movement) have presented the government’s plans in an outline coalition agreement, together with a budget annexe. Here we provide an overview of the plans related to payroll tax and immigration: 

  • Tax relief for middle-income working people: More pay for work by reducing the tax burden on employment and lowering the marginal pressure on ordinary taxpayers, for example, by introducing an additional income tax band. 
  • The Parliamentary treatment of the proposed legislation on self-employment (Assessment of Employment Relationships and Legal Presumption (Clarification) bill (wet VBAR) will continue: Employment market security will be promoted, e.g. for those genuinely self-employed (ZZP’ers) in the self-employment policy and through regulation of the employment agency (temping) sector. The aim will also be to move towards more permanent contracts for employees. To that end the parliamentary debates on the Assessment of Employment Relationships and Legal Presumption (Clarification) bill (VBAR) and the Provision of Personnel (Accreditation) bill (WTTA) will continue. 
  • Improving the business climate is a priority. This will also involve looking at tax measures. Recent tax increases for business owners, as well as tax increases on energy and assets announced since Budget Day, will be partially revoked.
  • No change in the tax position of an owner-occupier home to prevent uncertainty on the housing market. There will be no change to the mortgage interest deduction; the notional rental value will also remain unchanged.
  • Making vehicle fleets more sustainable will continue to be encouraged. Electric vehicle drivers will contribute fairly to ensure revenue remains sustainable in the long term. Subsidies will be abolished, the motor vehicle tax (MRB) weight correction for electric vehicles will remain.
  • Unemployment Insurance (WW) is to be reformed. The reform could consist of extending the notice period of employment contracts in combination with an incapacity benefit test (for unemployment benefit) by the Employee Insurance Administration Agency (UWV), or a reduction in the duration of unemployment benefit to 18 months. This has to be further detailed.
  • Compensation for the transition allowance to be limited to small employers (from 1-7-2026). The compensation scheme for employers upon dismissal due to long-term occupational disability (after the end of the two-year continued payment of salary obligation) will be restricted to small employers (with fewer than 25 employees). Employers with a workforce 25 or more people will no longer receive compensation.
  • The General Unemployment Fund (AWF) contribution will be raised by 0.1% from 2026 for both temporary and permanent employment contracts. 
  • Many immigration measures: The entire asylum and immigration system is to be overhauled. This will largely affect asylum seekers but measures are also being taken to control the scale and configuration of other forms of migration. An assessment framework will be created for new businesses in terms of the migrant workers required, space and energy demands.  
    • Migrant workers from outside the EU, with the exception of knowledge migrants, will become subject to a work permit requirement. The Netherlands Labour Authority (NLA) will carry out additional enforcement, also on this group.
    • Those employing migrant workers (non-Dutch residents) will become responsible for nuisance and the cost of migrant workers without proper accommodation (short and mid-stay). For this they must make agreements with municipalities governing how their short and mid-stay workforce is to be housed.  Other government authorities will be encouraged to allow more room for accommodation on the employer’s own premises.  
    • In the case of long-term residence, employers will also be made responsible for ensuring that these employees learn the Dutch language. 
    • In the area of labour migration the Netherlands is committed to restricting the free movement of people within the EU if, and insofar as, EU enlargement is to be considered.
    • The qualification requirements for the knowledge migrants scheme will be raised and made stricter. 
    • Migration for higher education will be restricted in the undergraduate phase, except for studies where there are employment market shortages, also taking local conditions into account (the greater the problems, the more restrictions). 
    • Study migration will become more selective through offering more courses in Dutch, setting an upper limit on the number of foreign students, with a restriction on obtaining a basic grant and increasing tuition fees for non-EU students. 
    • The Netherlands should not be naive about state actors sending people to this country or directing them for the purposes of espionage. Measures will be taken to protect our know how.