Second issue of Payroll Tax Newsletter 2025 published

The Tax and Customs Administration published the Second issue of its Payroll Tax Newsletter 2025 (in Dutch) on 24 December 2024. In this newsletter the tax authorities explain the changes affecting payroll tax from 1 January 2025. It is expected that the more comprehensive Payroll Tax Handbook 2025 (Handboek Loonheffingen 2025) will be published in February 2025 and will, of course, also include the information in this recent newsletter. 

The newsletter explains the changes, such as those included in the Tax Plan 2025, in more detail. Among other things, these publications cover the changes affecting the 30% facility, public transport tickets and adjustments in fixed amounts. 

This newsletter also discusses the abolition of the foreign tax liability from 1 January 2025, for example, and how it will affect employers who have an agreement with tax authorities under which they are allowed to offset the income tax/national insurance contributions to be withheld from incoming foreign employees against the actual income tax and any national insurance contributions payable, instead of applying the standard payroll tax tables. These types of agreements are also referred to as the 13th payroll run or Horizontal Inspection for expats. One advantage of such an agreement is that the employee then does not have to submit an income tax return. The Tax and Customs Administration states in the newsletter that from this year this simplified method may no longer be applied for employees living in the Netherlands who can no longer opt for a partial foreign tax liability. This also means that the tax authorities have withdrawn the existing agreements for this group of employees. There are transition arrangements in place for people who already applied the 30% facility in the last wage period of 2023 and still do. They can continue to opt for the application of the partial foreign tax liability up to and including the 2026 income tax return and an existing agreement will thus continue to apply to them as before. If you have made such an agreement in the past it would be wise to consider how this will affect your situation from this year.