Introduction support for recently arrived refugees - tax issues

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The introduction scheme applies to recently arrived immigrants aged between 18 and 55 with a refugee background.

The scheme is administered by the Directorate of Immigration and Diversity (IMDi) and combines an introduction programme with introduction support. The support is taxable.

For recipients of introduction support

Tax cards and prepayment deductions

The introduction support constitutes taxable income. The parties that pay the support must ensure that tax is deducted before the support is paid. The Tax is deducted on the basis of benefit recipient's tax deductions card. You must therefore order the tax deduction card. The tax deduction card is electronic so you should not give the card to the payer of the support.The organisation will retrieve the tax deduction card electronically after you have ordered it. 

The tax deduction calculation takes into account factors such as whether you have work income in addition to the support, whether you have expenses which entitle you to an allowance in your tax assessment, whether you have capital or debts, and the tax class you are in. If you are married and assessed jointly with your spouse, you will be assessed under tax class 2. Otherwise, you will be assessed under tax class 1.

The tax deduction will cover calculated tax and National Insurance contributions. If you believe that too much or too little tax has been deducted, you can have the tax deduction card changed here.

Tax returns, tax assessments and tax settlement notices

In March/April you will get a tax return. On this tax return, you should check and declare the income you received the previous year. Before the tax is calculated, you can deduct certain expenses which you have paid yourself.

You can also claim a "minimum standard deduction". 

You pay 25 percent tax on the income you have left after the deductions.

In addition, you must pay 5.1 percent National Insurance contributions on the gross support amount you receive. If you have received work income in addition to introduction support, National Insurance contributions will be 8.2 percent on your work income.  Introduction support gives no entitlement to pension credits.

Total income, including introduction benefit, over certain thresholds, it is paid bracket tax.

The tax office will calculate how much tax you must pay based on the information in the tax return and other information the tax office has about you.

The first round of tax settlement notices are ready on June. After that, the notices are continuously sent out until October. If you submit the tax return on paper, you will receive the tax settlement notice in August at the earliest.

What the municipal authority must do

Prepayment deductions

Anyone who pays introduction support must deduct tax. The tax must be deducted based on the support recipient's tax card.

The support recipient must order a tax deduction card before the municipal authority can retrieve it electronically. When the card is issued, consideration will be given to factors such as work income in addition to the support, travel expenses, childcare expenses, interest expenses and wealth In addition to the tax, the prepayment deduction will cover any National Insurance contributions.

Reporting duty

The municipal authority must report the introduction support and withholding to a-meldingen. See how to

The munipal authority will in the end of the income year, send you an annual statement.

Employer's contributions

The municipal authority will not pay employer's contributions on introduction support.
Information on introduction support can be obtained from the Directorate of Integration and Diversity.

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