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Legislative amendments with no shelf-life?


A majority of members of the Dutch House of Representatives [Tweede Kamer] (the so-called Kunduz coalition) submitted the budget for 2013 and its underlying legislative proposals to the House of Representatives just before the ‘Brussels deadline’ ran out. However, it is questionable whether the proposals will actually be enacted and implemented.

Retrenchment affecting travel expenses

The untaxed home-to-work payment of €0.19 per kilometre is to be abolished from 1 January 2013. It is now clear that this measure will have a major impact on commuters in the Netherlands. However, it will still be possible to refund business travel expenses free of tax in 2013.

From 2012, home-to-work travel will be classified as private, even for company cars. Private travel rates for leased cars will remain unaltered. This group of commuters seems to be favoured most by the new proposals. There appear to be transitional provisions for existing cases, which are for leases concluded prior to 25 May 2012 and cars for which private use is under 500 km (home-to-work journeys are not classified as private under this transitional provision). The transitional provisions apply until 1 January 2017 and will end in any event when a new lease is concluded.

The actual costs for home-to-work travel by public transport may no longer be refunded free of tax from 1 January 2013, although the transitional provision will spare public transport season tickets purchased before 25 May 2012. However, business trips undertaken by public transport will be refundable free of tax.

A number of parties to the so-called Kunduz agreement have indicated that their election manifestos will probably not include this measure. Furthermore, tendering the underlying legislative proposals to the House of Representatives has been suspended. It therefore remains unclear whether the measure will actually be passed.

Increase in the state retirement age [AOW leeftijd] from 2013

The state retirement age will be increased by one month from 1 January 2013. From 2014, it will continue to be increased, reaching 66 in 2019. Further increases will follow from 2019, reaching 67 by 2023. The state retirement age will thereafter be linked to life expectation figures.

Retrenchment affecting future pension accrual from 2014

From 1 January 2014, the retirement age for pension accrual will be adjusted to 67 years. This means that accrual rates will be adjusted (final salary schemes [eindloonregelingen] from 2% to 1.9%, average salary schemes [middelloonregelingen] from 2.25% to 2.15%). The annuity regime [lijfrenteregime] will be adjusted commensurately.

Employment bonus

The previously announced employment bonus for older employees and the mobility bonus for those above the age of 55 will not be enacted. Outgoing Minister Henk Kamp has, however, announced it will be easier to take on older employees.

Relaxation of the law on dismissal [ontslagrecht] from 2014

The law on dismissal and the Unemployment Benefits Act [Werkloosheidswet] are being reviewed. The House of Representatives will receive information on the following matters in June:

  • temporary increase in Unemployment Benefits Act contributions [WW-premie] in 2013;
  • unemployment benefits [WW-uitkering] to become partly the employer's financial responsibility from 2014;
  • dismissal payments [ontslaguitkering] to be set at a maximum of six months from 2014.

16% final levy for wages above €150,000

It has been announced that a temporary final tax levy [eindheffing] of 16% will be introduced in 2013. Employers will be required (for the time being) to pay a final tax levy of 16% on salaries that exceeded €150,000 in 2012.

Increase of final levy on excessive severance payments

The final tax levy rate [eindheffingstarief] for excessive severance payments will be increased to 75% with effect from 1 January 2013. This final tax levy will be imposed on the employer if a severance payment is made to an employee whose salary exceeds €531,000.

The Dutch go to the ballot box on 12 September 2012. It is thus highly questionable whether the budget submitted to Brussels will actually be enacted and implemented.


Portrait of Gilbert Joskin
Gilbert Joskin
Of Counsel