As of January 1, 2019, more wage tax tables will be introduced in order to distinguish between the following groups of employees.
1. Dutch residents
employees who have their permanent residence in the Netherlands.
2. Non-residents of the Netherlands
employees who are residents of other EU Member States or of an EEA country (Iceland, Norway and Liechtenstein), of Switzerland or of the BES-islands (Bonaire, Sint Eustatius and Saba).
3. Non-residents of the Netherlands
employees who are not residents of an EU Member State.
Residency must be determined on the basis of facts and circumstances, such as where someone has its social and economic life, where the family resides, the children go to school, etc.
The employees in group 1 are entitled to the tax component of the wage tax credit (the total of the general tax credit and the labour tax credit), the employees of group 3 are not entitled to this. An exception applies to employees in group 2, they are entitled to the tax component of the labour tax credit.
In this respect the Dutch tax authorities will monitor more stringently that employers report the actual foreign address of non-resident employees in the Dutch wage tax returns. Reporting of the (temporary) address where the employee stays during his Dutch presence is not sufficient anymore.
If the employer does not have the official foreign home address of the non-resident employee, he will be obliged to withhold Dutch wage tax in accordance with the tax rate for anonymous taxpayers (52%).