On Tuesday 20 September 2022 the Dutch state secretaries for Finance published the 2023 Tax Plan and related legislative tax proposals. This newsflash discusses the proposals we consider most relevant for (international) businesses.
Corporate income tax rates and threshold amount
In the 2023 Tax Plan, it is proposed to increase the lower corporate income tax rate from 15% to 19% whereby the threshold amount of EUR 395,000 is proposed to be reduced to EUR 200,000. The adjustments of the corporate income tax rate and threshold amount are proposed to take effect as from 1 January 2023.
Box 2 tax rates for income from substantial interest
In the 2023 Tax Plan, it is proposed to introduce a step-up rate of 24.5% for a threshold amount of EUR 67,000 of income from substantial interest. The general tax rate will be 31%. The introduction of the separate rates is proposed to take effect as from 1 January 2024.
Mandatory salary of directors/shareholders (in Dutch: gebruikelijkloonregeling)
Individuals who work for companies in which they own a substantial interest are subject to the mandatory salary regime pursuant to which the mandatory salary (which is taken into account for personal income tax and wage taxes) is to be aligned with the highest of the following amounts: (i) 75% of the salary of the most comparable employment, (ii) the salary of the best-paid other employees of the entity or entities affiliated with it or (iii) EUR 48,000.
The rule under (i) implies that the salary of a director/majority shareholder can be set 25% lower than the most comparable salary. It has also been proposed to abolish this so-called efficiency margin with effect from 2023.
Real estate transfer tax rate
The general real estate transfer tax ("RETT") rate will be increased from 8% to 10.4% on acquisitions of Dutch immovable property or the acquisition/increase of a substantial interest in property rich entities as per 1 January 2023.
The reduced RETT rate of 2% remains applicable to the acquisition of owner-occupied properties, provided the immovable property will serve as the principal residence for the natural person who acquires the property.
VAT amendments
The VAT rate applicable on the supply and/or installation of solar panels will be 0%. The 0% rate is only applicable on solar panels installed on or in the immediate vicinity of housing (also public housing and leased out housing). Also the installation services in respect of the aforementioned solar panels will benefit from the 0% rate.
Other wage tax amendments
30% ruling limited to maximum public sector salary
Employees who are recruited from abroad and have specific expertise which are rare to find in the Netherlands are offered a favorable tax regime under which 30% of their gross salary can be paid as a net remuneration. In the 2023 Tax Plan, it is proposed to limit application of the 30% ruling to the maximum public sector salary (EUR 216,000). This limitation is proposed to take effect as from 1 January 2024.
For existing 30% rulings with an ending period after 1 January 2024, a transitional scheme will be introduced pursuant to which the limitation will take effect as from 1 January 2026.
Work from home allowance and travel expenses
The Dutch Wage Tax Act includes specific exemptions. If an allowance falls within the scope of a specific exemption, the value of this allowance does not have to be deducted from the discretionary (fixed) amount that an employer can grant tax-free to its employees (subject to conditions).
In response to the Covid-19 developments with regard to remote working, a specific exemption for working from home was introduced as per 2022. Earlier in 2022, it is proposed to increase the tax-free amount that can be provided per day to EUR 2.13 as per 2023.
In the 2023 Tax Plan, it is also proposed to increase the existing specific exemption for travel allowances of EUR 0.19 per kilometer to EUR 0.21 in 2023 and EUR 0.22 in 2024.
Discretionary amount
It has also been proposed to increase the discretionary amount (in Dutch: vrije ruimte). The discretionary amount applicable for the calendar year 2023 will be adjusted to 1.92% up to and including EUR 400,000 of wage costs (from 1.7% in 2022).
Way forward
During the next couple of months the 2023 Tax Plan will be discussed in both chambers of Dutch parliament. This means that the proposed measures are subject to changes. We will keep you updated of any relevant changes. Please do not hesitate to contact us in case you have any questions.
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