In a letter to the Lower House, the Deputy Minister of Finance, Mr. Weekers, has proposed delaying for one year, i.e. until January 1, 2013, the effective date of the bill Uniform Definition of Salary Act (“UDS Act”). The UDS Act aims to do away with most of the different definitions of salary as they apply to payroll taxes and social security contributions, employee insurance contributions, and the income-related contributions for health insurance under the Health Insurance Act.
The reason for extending the effective date is the new allowance system (“NTS”), which the Dutch Revenue is expected to be able to introduce in 2011. The introduction of this system will allow the Dutch Revenue to process all allowances (rent and care allowance, supplementary child benefit, and childcare allowance) in one automated system. As a result, changes in income or household composition can be processed at one and the same time for all allowances. Currently, the Dutch Revenue maintains a separate system for each allowance. Each system works independently and with its own data.
Further investigation into the consequences of implementing the NTS in 2011, and setting the effective date of the bill UDS Act as of January 1, 2012, made apparent that this could cause the public considerable inconvenience. It has therefore now been proposed delaying the effective date of this bill until January 1, 2013.