Budget Day 2023 was here again. On 20 September 2022, Mrs Kaag, the Dutch Minister of Finance presented the Dutch Budget Plan 2023 and tax measures for 2023 to the Lower House of Parliament. The government is setting aside a considerable amount of money to ease purchasing-power problems as a result of the energy-crisis. The most important tax measures included in the Tax Plan are as follows:
Corporate income tax
- As of 2023 profits will be taxed at 19% over the first EUR 200,000 (2022:15%). Profit exceeding this amount will remain taxed at 25,8 %.
- As of 2024 fiscal investment institutions (FBIs) may no longer directly invest in property.
- Environmental Investment Allowance and Energy Investment Allowance increases as of 2023.
Personal income tax
- Box 1: the basic tax rate drops from 37.07% to 36.93% as of 2023. The top rate remains 49.5%.
- Box 2: as of 2024 a split rate will apply for substantial interests, i.e. 24.5% for benefits up to and including EUR 67,000 and 31% on the excess.
- Box 3: the tax rate will increase annually from 31% in 2022 to 34% in 2025. The basic allowance or tax-free amount will be raised to €57,000 for a single taxpayer in 2023 (couples : € 114,000).
- The maximum labor tax credit increases from EUR 4,260 to EUR 5,052 as of 2023.
- Restoration of rights in Box 3 will be enshrined in law.
- Box 3 Bridging Act largely in line with Box 3 restoration of rights.
- Income-dependent combination tax credit (inkomensafhankelijke combinatiekorting; IACK) to be phased out as of 2025.
- As of 2025 general tax credit to be decreased based on aggregate income.
- Vacant possession ratio to be updated and limited in scope as of 2023.
- Average salary plan to be abolished as of 2023.
- Tax-deferred retirement reserve to be phased out as of 2023.
- Quicker decrease of self-employed persons deduction as of 2023.
- Cap on deductible periodic donations as of 2023.
- The tax averaging facility for highly fluctuating income (‘Middelingsregeling) will be abolished as of January 1, 2023. Transitional rules for the years after 2022 will be introduced, provided that 2022 is also included in the averaging period. This means that the last period over which averaging of fluctuating income can take place is 2022-2023-2024.
Payroll tax and social security contributions
- As of 2024 limited use of 30% ruling for salaries above EUR 216,000.
- Fixed exemption for the first EUR 400,000 of the payroll for tax purposes set at 1.92%. Fixed exemption for the payroll above that amount remains at 1.18%.
- Untaxed kilometer allowance to increase to EUR 0.21 per km in 2023 and to EUR 0.22 km as of 2024.
- Easing of normative salary for innovative start-ups abolished as of 2023.
- Using compulsory retirement provision to purchase an annuity after the commencement date has passed to be codified in law.
- Addition to income percentage for electric cars to stay at 16% up to maximum list price of EUR 30,000.
- VAT on supply and installation of solar panels reduced to 0%.
Procedural law amendments
- More options to compensate unreasonable late payment interest.
Inheritance and gift tax
- Gift tax exemption own home (tax-free lump sum) drops from EUR 106.671 in 2022 to EUR 28,947 as of 2023. Tax-free lump sum abolished as of 2024.
Excise taxes and consumption tax
- Reduced excise duties on fuel extended until July 1, 2023.
- Consumption tax on non-alcoholic beverages increased as of 2023;
- mineral water excluded as of 2024.
- Low-rate excise duty on beer will increase as of 2023 and 2024.
- Excise duty on tobacco will increase in 2023 and 2024.
Tax Plan miscellaneous
- Combating arrangements and evaluated schemes, including the business succession schemes.
- General real estate transfer tax rate increased from 8% to 10.4% as of 2023.
- Vehicle tax (BPM) exemption for business vans phased out as of 2025 (with the exception of zero-emission vans).
- As of 2025 BPM tax base for vans based on CO2 emissions.
- Temporary increase duty rate Mining Act.
- Air passenger tax increased.
- Tightening of CO2 tax on industrial emissions.
- Bill Minimum CO2 Price on Industrial Emissions Act.
The original Budget plan 2023, tax measures and proposals as submitted to the Parliament can be find here: https://www.binnenlandsbestuur.nl/bestuur-en-organisatie/de-miljoenennota-2023
The above will now follow the normal budget adoption procedures in both chambers. Therefore, additional changes are possible.
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