Two Important Legislative Changes for SME’s

Two Important Legislative Changes for SME’s

Since the beginning of this year, a great number of new rules and regulations have come into effect. Here is a rundown of two legislative changes that are to take effect on the 1st of July 2019 and the beginning of 2020.

Increase of minimum wage for young workers
Young personnel have over the years proven to be a lot cheaper for SME’s, but beware: it will be a little more expensive as from July 1, 2019. The fixed percentage of the minimum wage will increase to 50, 60 and 80 percent of the ‘normal’ wage for 18, 19 and 20 year-old employees respectively. It will be 100 percent for 21-year-olds. The statutory minimum wage for fulltime employees aged 21 years and older will rise from €1.615,80 to €1.635,60 per month. The changes in percentage are shown in the table below.

Age Before 01-07-2019 As from 01-07-2019
21 years 85% 100%
20 years 70% 80%
19 Years 55% 60%
18 years 47,5% 50%


Sole proprietors to receive new VAT numbers in 2020
As a form of showing that your firm is subject to sales tax, the Dutch Tax Authorities mandate companies to state their VAT numbers on their invoices and websites. This, however, makes sole proprietors vulnerable to identity fraud and other privacy violations since the current VAT number consists of their citizen service number (BSN). BSN is a unique personal number allocated to everyone registered in the Personal Records Database (BRP). It is solely intended for private communication between citizens and the government. Nonetheless, for self-employed persons, their BSN is publicly accessible.

The Dutch Data Protection Authority (AP) imposed a ban on the Tax Authorities in December 2018 for processing BSN in the VAT identification number. For that reason, all sole proprietors in the Netherlands will be assigned a different VAT number before the end of this year. The new VAT number will no longer contain privacy-sensitive information. Firms are to use this new VAT identification number as from January 1, 2020 on their invoices, web-shops or websites and for all transactions based on EU regulations and trade within the EU. So remember to adjust this in your records at the end of the year.

Temporarily two VAT numbers
An important point of attention is that sole proprietors will continue to use their old VAT number when communicating with the Tax Authorities, even after January 1, 2020. The reason being that not all the IT systems of the Tax Authorities are ready to facilitate the changes yet.

Therefore, firms will temporarily have two different VAT numbers:

  • the new VAT number, which is to be used externally on invoices, web-shops or websites and in contacts with customers and suppliers and;
  • the old VAT number, as aforementioned, to be used when communicating with the Tax Authorities.

In the long term, the Tax Authorities strive to use one VAT number.

If you would like to receive more information and/or professional advice regarding the above-mentioned legislative changes, please do not hesitate to contact us.

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