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New VAT exemption for small businesses as of 2020

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Entrepreneurs with an annual turnover under € 20,000 may be exempt from paying VAT if they opt for the so called small businesses VAT scheme (“KOR”). In order to participate in this small businesses VAT scheme, an application is to be made with the Dutch tax office at least 4 weeks before the start of the oncoming VAT quarter.

If you are already exempt from paying VAT, your exemption will continue automatically. If you no longer require a VAT exemption or do not qualify for the new exemption rules, you must inform the Dutch tax office.

When applying the small businesses VAT scheme, such entrepreneurs with an VAT exemption no longer charge VAT to their clients. Also, when applying the exemption, such small businesses do not have to file a VAT return, meaning they do not have to pay VAT but can also not deduct VAT. In addition applying small businesses are exempted from keeping a VAT administration.

The exemption of not having to file VAT returns and keeping an administration only applies to goods and services provided within the Netherlands. Small businesses that apply the exemption, will have to continue the exemption for at least 3 years, unless the annual turnover exceeds €20,000. In case of exceeding the tax office must be notified.

New as of 2020 is that legal entities (e.g. the B.V.) are also eligible for the small businesses VAT scheme.

We can assist to check the pro’s and cons of this new VAT exemption and to apply for the new scheme. We can also assist your company with all required tax, legal and accountancy needs.

 

Annual indexation for 2020 minimum salary 30% ruling

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Salary criterion –
A salary criterion is to be met to apply the 30% ruling, below is the annual indexation for the 2020 minimum salary to qualify for the 30% ruling. There are three qualifying salary groups:

1. Scientists do not have a salary minimum;

2. People below 30 years of age with a Masters education have a minimum salary requirement of EUR 29,149 (2020) / EUR 28,690 (2019) / EUR 28,350 (2018) excluding the 30% reimbursement and EUR 41,642 (2020) / EUR 40,985 (2019) / EUR 40,500 (2018) including the 30% reimbursement;

3. For Expats that do not match the groups under 1 and 2, a minimum salary requirement applies of EUR 38,347 (2020) / EUR 37,743 (2019) / EUR 37,296 (2018) excluding the 30% reimbursement and EUR 54,782 (2020) / EUR 53,918 (2019) / EUR 53,280 (2018) including the 30% reimbursement.

Please note that these minimum amounts are subject to annual indexation. In principle the salary criterion may not be decreased pro rata in case of a part time employment. There is an exemption on this rule in case of parental leave.

The salary criterion in principle replaces the prior criterion of required specific skills, in that sense the ruling has become more accessible. Please note however that the salary criterion is a continuous test, the employer is therefore held to continuously check whether all requirements are still met by its employee.

Here you can find full details on all criteria to be met in order to qualify for the 30%-ruling.

We can assist with the full process of obtaining the 30%-ruling, please contact us.