Abolishment deemed employment relationship for non-executive board member listed company

It is proposed to abolish the deemed employment relationship for non-executive board members of listed companies. This is in line with the legislation previously introduced for supervisory board members in 2017. Consequently, it will not be necessary to withhold, report and remit wage tax for these board members as from 1 January 2018. As from that date these board members will be treated similar to a supervisory board member in a two tier board.

Legislation excessive severance payment adjusted

It is proposed to adjust the legislation regarding the excessive severance payment scheme. The Netherlands Supreme Court ruled in December 2016 that unconditional stock options granted in the calendar year prior to the year of termination should be exempt from the calculation to determine the excessive severance payment. The proposed adjustments will prevent this as a result of which these stock options should be included in the calculation.

New arrangement for issuing stock options by startups

A new scheme will apply for issuing stock options to employees of startups. This was already included in the Tax Plan 2017 and will become effective as of 1 January 2018. Since startups often do not have enough opportunities to pay more salary, this scheme will provide for more flexibility and support. If a stock option right is granted to an employee, the employee is entitled to wage upon exercising or alienating that right. Insofar the gain for the employee does not exceed EUR 50,000, only 75% of that gain will be taxable (thus exempting 25%). The exemption amounts to a maximum of EUR 12,500. Stock options granted in 2017 may also be part of the new exemption from 1 January 2018.