Financial changes to be implemented in the Netherlands from 1 July

02.07.2023 On 1 July 2023, several financial changes will come into force in the Netherlands. You can read below how these changes might affect your business.

Increase in minimum wage

As usual, the legal minimum wage will increase as per 1 July. Fulltime employees that are 21 or older will receive at least 1995 euro per month, which amounts to an increase of approximately 3%. The state pension and unemployment benefits will increase accordingly as well.

Increase in interest rates

The current tax interest is 4%, which applies when the amount to pay to or receive from the Dutch tax authorities varies from the amount that is already paid. This will increase to 6%, which is more aligned with the current inflation rate. The statutory interest rate that applies in the private sector will also increase from 1 July. Creditors will be able to charge 14% over outstanding amounts from 1 July, instead of the current 12%.

More opportunities for cross-border workers to work at home

From 1 July, cross-border workers who work in another country than their country of residence will be allowed to spend half of their total working hours at home without having consequences to their status on the social security law.

Good Landlord Act comes into force

Municipalities will have more authority to take measures aimed at protecting tenants. In addition to the general rules set by the central government, municipalities will be able to enforce additional rules to protect tenants, for example with regard to the rental price, maintenance, number of residents, discrimination and intimidation. Municipalities may also require a special permit for property owners to be able to rent out to migrant workers.

Rent increases

Rental price of social housings will increase from 1 July. If the pure rental price (excluding service costs) amounts to 300 euro per month or more, the rent may be increased by 3.1%. If it is lower than 300 euro per month, it may be increased by 25 euro per month.   For free sectors, the maximum increase is set at 4.1% since 1 January 2023.

Re-integration of sick employees

When an employee is sick for a long term and it is not clear when the employee can return to work, the employer must draw up a re-integration plan, which describes how the employee can re-integrate as quickly as possible. From 1 July 2023, it will be mandatory to incorporate opinions of both parties (employer and employee) into the re-integration plan.

Internet consultation for re-opening the UBO register

08.06.2023 On 30 May 2023, the Dutch Ministry of Finance has opened an internet consultation for a legislative proposal to (partially) re-open the UBO register. The consultation is open until 28 June 2023.

Status of the UBO register

Since last year, most legal entities in the European Union must register their Ultimate Beneficial Owners (UBOs) at their relevant national authority, which was open for the public. A natural person is a UBO when they hold (directly or indirectly) more than 25% of shares, voting rights or economic interest, or can otherwise exercise de facto control. However, on 22 November 2022, the European Court of Justice (ECJ) ruled that the UBO register must not be publicly accessible due to its interference with the fundamental rights. In the Netherlands, the Ministry of Finance made the UBO register completely inaccessible directly after this ruling, and it currently cannot be accessed by anyone.

Ongoing internet consultation

Although the ECJ made it clear that it should not be fully open to the public, different stakeholders still have the necessity to access the register. The Dutch government is therefore working on a legislative proposal to partially re-open the register. According to the draft proposal, the UBO-register will be accessible by (i) organisations that are obliged by law to conduct client research; (ii) organisations that need to comply with obligations arising from the Sanctions Act 1977; and (iii) other parties with legitimate interest (including the UBOs themselves). However, the proposal is not final. Until 28 June 2023, any member of the public can react to the draft proposal via https://www.internetconsultatie.nl/beperkingtoeganguboregisters/b1 and suggest alternative solutions. At the same time, it also means that the UBO-register will most likely be (partially) open again in the Netherlands. It remains to be seen when this will be effective and whether more parties will be authorised to access the register.

Dutch banks to explore the possibility of basic payment accounts for business clients

17.05.2023 On 10 May 2023, the Dutch Banking Association (‘NVB’, Nederlandse Vereniging van Banken) announced that Dutch banks are exploring the possibilities and conditions for basic payment accounts (in Dutch: basisbetaalrekening) for businesses that cannot open a bank account in the Netherlands. Basic payment account Basic payment account is already an option for private (non-business) clients in the Netherlands since 2001. It was a solution to prevent people who cannot open a bank account from being socially excluded, considering the importance of having a bank account. A basic payment account works the same as a normal payment account, with the exception of the possibility of being overdrawn, using a credit card and opening a savings account. However, the basic payment account has been a possibility only for private clients. Business clients often rejected by banks In the recent years, NVB has pointed out multiple times that the Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft) has unintended effects of excluding certain businesses from obtaining a bank account. Wwft obliges banks to perform an intensive client research where the risk of money laundering or terrorism financing is high, and banks will reject a client if this risk is not mitigated to a satisfactory extent in their view. In addition, banks have the general discretion to reject a client if it does not meet their internal policy. For instance, banks have rejected businesses from tobacco or fossil energy industry due to their sustainability policy. In 2021, businesses have been rejected of a bank account 2700 times according to NVB. However, the impact might be bigger than what this number suggests, since a number of businesses do not apply for a bank account given their high chance of rejection. More information to follow NVB expects to come up with a proposal with more concrete plans in the beginning of July.

Changes planned on Dutch employment laws

12.04.2023 On 3 April 2023, the Dutch Minister of Social Affairs and Employment (Van Gennip) wrote to the House of Representatives that some changes are planned to be made on Dutch employment laws. More income security for employees The most important part of this announced change is that the Minister aims to offer more security to employees, namely by abolishing on-call employment agreements (oproepcontracten), also widely known as zero-hour contracts (nulurencontracten) or min-max contracts (min-maxcontracten). Under such on-call employment agreements, there is currently no obligation to specify the number of working hours and the employee would only be paid for the hours actually worked. If such agreement contained a minimum and maximum number of hours to be worked (but flexible within that range), it is a min-max contract. Otherwise, it is a zero-hour contract through which the employee is not guaranteed of any work, and thus income. With both arrangements, the employer has to give 4 days’ prior notice to the employee for an on-call work.   Since on-call employment agreements provide little income security to employees, the Minister plans to abolish it. Temporary contracts Currently, an employment agreement is regarded to be a permanent one if more than 3 temporary contracts have been in place. However, if there is a break of longer than 6 months during which the employee is not employed, a new temporary contract is allowed to be in place that counts as the first contract. The Minister plans to extend this term from 6 months to 5 years in order to prevent circumventions by employers. Mandatory disability insurance for self-employed Lastly, the Minister also announced that self-employed people in the Netherlands will be obliged to take out a disability insurance. There is no such obligation currently, meaning self-employed people who become unfit for work may not be entitled to a comparable level of income. Three to four years The intention is that these changes will be effective within 3 to 4 years. The Minister hopes to have the legislative proposal approved by the House of Representatives by the beginning of 2024, which will not be difficult if supported by the government.