We understand that, around the turn of the year, you don’t immediately dwell on all the changes in the law. That’s why we’ve put together an overview for you of the most important new legislation for SMEs that applies from 1 January 2020.
- Balanced Labour Market Act (WAB)
We have written several blogs about this. Read more about it on our WAB page.
- Introduction of the SME Sick-Leave Relief Insurance
A package of measures is meant to make the continued-wage-payment obligations for sick employees easier and cheaper for small entrepreneurs. Agreements on this are set out in a covenant between employers’ organisations and the Association of Insurers (Verbond van Verzekeraars).
The measures include, among others:
– an SME sick-leave relief insurance (VoV). This insurance supports you in your reintegration obligation towards a sick employee. The insurance absorbs the financial risk and helps you with the obligations and tasks surrounding continued wage payment during illness.
– an allowance for the costs of continued wage payment totalling €450 million. Small employers in particular benefit from this.
– the company doctor’s medical advice becomes decisive when assessing reintegration efforts. Based on this advice, you set up the reintegration process with your employee. (This last measure takes effect on 1 January 2021.)
Read more here.
- Rewarding staff extra through a wider work-related costs scheme (WKR)
Do you have staff? You can reward your employees extra thanks to a wider work-related costs scheme (WKR). From 2020, you can give your staff up to €2,000 more in tax-free allowances. You may also reimburse something from which your employees can benefit privately. For example, a gym membership or a Christmas hamper. In 2019, you were allowed to give tax-free allowances up to 1.2% of the wage bill (the wages of all employees combined). This is the free space. This free space was increased on 1 January 2020 by 0.5 percentage points to 1.7% over the first €400,000 of the wage bill.
Read more here.
- Minimum wage increases as of 1 January 2020
The gross amounts of the statutory minimum wage and the minimum youth wage rose on 1 January 2020.
The statutory gross minimum wage (WML) for employees aged 21 and over with full-time employment has, since 1 January 2020, been:
€1,653.60 per month
€381.60 per week
€76.32 per day
Read more here.
- Box 2 rate from 25% to 26.90%
Do you have income from a substantial shareholding in a company? You have a substantial shareholding if you own at least 5% of the shares of a company. Income from this is taxed under box 2 of income tax. The tax rate on profit from a substantial shareholding has gone from 25% to 26.25%. In 2021, the rate will become 26.90%.
Read more here.
- Change to the corporate income tax rate
In 2020, the high corporate income tax (vpb) rate will not be reduced, contrary to earlier plans. From 2021, the high corporate income tax rate will indeed go down, but by less than had been planned. The high vpb rate applies to the portion of profit above €200,000. This remains 25% in 2020 and goes to 21.7% in 2021. The low rate, which applies to profit up to and including €200,000, has gone to 16.5% and will go to 15% in 2021.
Read more here.
- Energy Investment Allowance (EIA)
Are you investing in energy-saving techniques? Or in energy-saving business assets? Then you may be eligible for the Energy Investment Allowance (EIA). These investments are then deductible from income tax or corporate income tax. From 1 January 2020, the deduction also applies to investments that reduce CO2 emissions.
Read more here.
Nothing changes as often as laws and regulations. We would like to point out that our blogs may no longer be in line with current laws and regulations and may therefore be outdated. If you have questions or a problem relating to this blog, or if you require legal assistance, please contact us.
