On June 7, 2010, the outgoing Minister of Finance, Mr. De Jager, submitted the bill “Miscellaneous Tax Measures Act 2010” to the Lower House. The proposed measures have a broad scope: technical and editorial changes, codification of policy, correcting undesired consequences of the Dutch Supreme Court’s decisions, and adjustments to regulations arising from European law. A brief description of a few of the proposed amendments follows. Unless specified otherwise, the intended effective date is January 1, 2011.
Quarterly VAT returns extended by one year
The extended option to file VAT returns quarterly instead of monthly will continue in 2011. This was announced by the Cabinet in its explanatory notes to the bill. This offers increased liquidity to entrepreneurs who are liable, on balance, for VAT.
Extension of scope of environmental investment deduction for electrically operated cars
In order to stimulate the use of electric cars, all electric cars will qualify for the environmental investment allowance with retroactive effect from January 1, 2010. The previous condition for qualification – that the car be used for the commercial transportation of passengers by road – will cease to apply. This legislative change is the codification of a policy decision.
Amendment to the allocation of the results from making community of property assets available
The policy, which requires that the results from making marital property assets available must be allocated equally to both partners, is to be stated explicitly in the Personal Income Tax Act 2001 (“PITA”). This is a correction of a Dutch Supreme Court decision dated January 15, 2010, which decision leads to the taxpayer holding the administrative power having to declare the full result. With regard to this, a deferral facility for the making assets available will be incorporated into the PITA for transfers under the terms of marital property laws. Marriage in community of property no longer means having to settle accounts under the facility for making assets available: half of the book value can be transferred to the spouse without tax consequences.
Reference date Box 3
Based on the Tax Simplification Act 2010 that was approved by the Upper House at the end of 2009, only one reference date remains as of January 1, 2011, for taxable income from savings and investments in Box 3: the start of the calendar year. When immigration or emigration causes a fluctuating non-resident taxpayer status in the course of a year, the start of the calendar year is, here too, the reference date. The tax advantage from savings and investments will then be recalculated in proportion to time.
Deduction of expenses on historic buildings for non-resident taxpayers
A non-resident taxpayer is generally not eligible for personal deductions under the PITA unless he or she chooses to be treated as a resident taxpayer under the PITA. Doubts have arisen concerning the sustainability under European law of expenses relating to historic buildings not being deductible, one of the categories of personal deductions. For this reason, the proposal is that these expenses also be deductible for the non-resident taxpayers.
One-time raise in the personal income tax threshold 2009
As announced by the Minister of Finance in a letter of March 1, 2010, to the Lower House, measures were taken to prevent single people who only receive the old-age pension, from having to undergo an income tax assessment in 2009. To this end, the tax threshold will be raised this once, with retroactive effect from EUR 43 to EUR 50. As a result, approximately 35,000 people will not have to file tax returns.
Work-related costs regulations 2011
Based on the above-mentioned Tax Simplification Act 2010, work-related costs regulations will be introduced under the Payroll Tax Act of 1964, as per January 1, 2011. This bill proposes a number of technical amendments with regard to:
· The valuation of facilities in the workplace;
· The choice facility;
· Restriction of the tax base for calculating the free margin, or the notional margin, in the case of payments to parties other than active employees; and
· The provisions for artists, professional athletes, and foreign groups.
Expansion of concept of “beneficial ownership” under real estate transfer tax
In its decision of December 11, 2009, the Supreme Court ruled that the acquisition of beneficial ownership of a component of real estate (such as building) for which no limited rights (such as building rights) are established, is exempt from real estate transfer tax. The Minister of Finance considers this an unwelcome development that is not in accordance with the meaning of the law.
According to him, particularly concerning situations of affiliated parties, real estate tax can be evaded in this way. The proposal is to amend the Legal Transaction Taxation Act of 1972 in such a way as to explicitly stipulate that the following may be subject to taxation: the acquisition of beneficial ownership of real estate, or the rights to which that real estate is entitled, as well as the acquisition of a system of rights and obligations that represent the interest in a component of real estate.
Amendments in connection with the revision of the Inheritance Tax Act
The bill contains a number of measures of mainly technical nature with regard to the amendments to the Inheritance Tax Act of 1956 as of January 1, 2010. In accordance with a commitment made during Parliamentary debate, among other things, the one-time extra extended exemption for children under gift tax is amended. The benefit from the exemption may thus be used for mortgage debt payments, and for maintaining and improving one’s home.