For the wage tax table of a Ukrainian refugee who has been residing in the Netherlands for more than 6 months, it may be assumed that the Netherlands is the country of residence for tax purposes. This principle does not necessarily apply to the income tax return.
Source: Belastingdienst, 18 January 2023
Are you an employer and do you want to hire a Ukrainian refugee? Then you must determine their tax residence, so that you know which wage tax table you should apply. However, you may not be able to determine their tax residence straight away. Has the Ukrainian refugee been in the Netherlands for at least 6 months and does he or she provide you with a place of residence in the Netherlands? Then you can assume for the payroll taxes that this place of residence is also the tax residence and you should apply the wage tax table for residents of the Netherlands.
You must determine the tax residence for each employee. By ‘tax residence’ we mean the full address of the employee. If someone has residency in the Netherlands, this does not mean that their tax residence is here as well. You determine the tax residence based on the facts and circumstances that are known to you as an employer. You can read more about this in section 2.3.3 and section 29.1 of the Payroll Tax Manual. You can download the ‘Handbook on Payroll Taxes’ on the ‘Payroll Taxes’ page: ‘Handboek Loonheffingen’ downloaden op de pagina ‘Loonheffingen’.
Why do you need to determine the tax residence?
Which payroll tax table you should apply for an employee depends, among other things, on the tax residence of that employee. If you know what the tax residence is, then you also know the tax country of residence. There is a special payroll tax table for employees living in a ‘third country’. Ukraine is such a third country. If you apply the table for employees who live in a third country, you will deduct less wage tax credit in comparison with the table for employees living in the Netherlands.
Which payroll tax table do you apply to Ukrainian refugees?
This depends on whether you can determine the tax residence. If you can determine the tax residence, then you will also know the tax country of residence. You apply the wage tax table that goes with this:
In all other cases, you apply the anonymous rate.
Please note: The above does not automatically apply to your employee’s income tax return.
Moreover, the Dutch Tax authorities (Belastingdienst) state that a Ukrainian refugee in general will not be entitled to the 30% ruling. We refer to our previous news item about this position.