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Stamrecht payments are no annuities under Dutch tax treaties

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Dutch Supreme Court has ruled that standing right (stamrecht)  annuities – following from severance payments – do not comply with the annuity definition in tax treaties that the Netherlands has concluded.

Previously, taxpayers with an annuity were entitled to an exemption from deduction of wage tax on their annuity, because the annuity met the conditions of the definition of the term annuity in the tax treaties. The Supreme Court now states that the employment history of the severance payment from which the annuity has arisen must be examined. In these cases, this means that both the severance payment from the past and the subsequent annuity payment are qualified as income from work.

This means that the annuity – as a result of severance payments – paid abroad by the Dutch entities are regarded as earned income. Despite the tax treaties concluded by the Netherlands, these revenues are taxed in the Netherlands. If an annuity results from a severance payment of an employment in the Netherlands, it in principle is taxable in the Netherlands. If part of the initial severance payment can be contributed to an employment outside the Netherlands a partial exemption may be allowed.

Only if an annuity payment is intended as a pension for the bridging period until the pensionable age can it be qualified as a pension benefit. The employee and employer must have agreed this at the termination of the employment.

The tax exemption remains in force for the year 2017, but from 1 January 2018, these annuities are taxable in the Netherlands. The exemptions granted in the past are withdrawn from 1 January 2018.

No Dutch dividend tax per 2018 for tax treaty countries

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As per 2018 new Dutch tax legislation will be imposed which allows full exemption of Dutch dividend withholding tax (DWT)  for qualifying shareholders located in countries outside the EU.

Such countries must have entered into a tax treaty with The Netherlands and this tax treaty should contain a dividend article. The benefit to be achieved by this exemption can be upto 15% of the dividends.

If you have any questions about the conditions to qualify for this exemption, please contact us.

Application term 30%-ruling reduced to five years as of 2019

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In the plans of the newly established Government a revision of the 30%-ruling legislation is taken up. The good news is that the 30%-ruling is not abolished as the ruling has been subject of recent political discussions of possible abolishment. However the application term of the ruling is planned to be reduced further. Click here for our latest update!… Read More

Tax deductible study tuition expenses 2017 / 2018 / 2019 / 2020 / 2021

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Tax deduction / deductible study tuition fee expenses. Study tuition costs are expenses made for education to obtain a (better) position on the labour market or to maintain current work-related knowledge.

The following costs can be deductible: tuition / application fee, enrolment fee, books and other literature and costs of exams. Costs of a language course can be deductible but only under certain strict conditions. Study costs have to be a financial burden for the person following the studies, meaning the fees may not be paid through a gift and/or scholarship(s). … Read More

Fill in a tax return over the year of migration and – in most cases – receive a tax refund!

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In most cases a tax and premium benefit can be achieved in the year of migration, either moving to or moving out of the Netherlands. As to the premiums this benefit follows from the fact that premium can be calculated on a time related basis.

This in practice means that per month no more premium can be due than 1/12 of the maximum annual premium. When the taxable income on annual basis is higher than appr. EUR 34,000, this time related method may well offer a benefit.

As to the tax part; employers calculate the wage tax due on annual basis and divide the outcome over 12 months. … Read More