Good advice always pays off
Financial tips
You can still use the annual allowance until Dec. 31, 2024, to build up a supplemental retirement benefit. How much can be built up depends on income in 2023. Premiums paid in 2024 are eligible for deduction in the 2024 income tax return.
Tax Plan 2025
This Budget Day Special lists the most important proposals from the Tax Plan 2025 and additional bills for you. Many proposals have already been announced earlier, for example in the Spring Memorandum. The special is divided into the following topics:
- measures enterprises;
- business succession relief measures;
- measures employer;
- VAT & excise tax measures;
- measures real estate;
- car & mobility measures;
- measures (wealthy) individuals;
- measures international situations;
- energy & environmental measures; and
- other measures.
The proposed measures will take effect Jan. 1, 2025, unless otherwise stated.
COMPANIES
Adjustment of interest deduction for real estate entities
The interest deduction limitation for real estate entities is tightened. For leased real estate, interest deduction is optimized by spreading interest balances across multiple companies. This prevents running into the limits of the earnings stripping measure (€1,000,000 or 25% of adjusted profit). To counteract this, the threshold of €1,000,000 is removed for companies with real estate leased primarily to (unrelated) third parties. Splitting up real estate entities in order to optimize interest deductions will then no longer have the intended effect.
Tip
Reassess the structuring of real estate activities.
Objection and appeal by RFO in the case of MIA and Vamil
The income tax and corporate income tax have a number of fiscal investment schemes, such as the EIA, MIA and Vamil. For these, the investment must first be registered with the Rijksdienst voor Ondernemend Nederland (RVO). The application process of the MIA and Vamil now differs from the EIA. It is desirable to bring this into line. It is therefore proposed that from now on the RVO also issues a statement for the MIA/Vamil, against which the taxpayer can lodge an objection with the RVO. In this way, the technical assessment of the application will lie entirely with the RFO.
Dividend tax record date
The record date was introduced on January 1, 2024. This date is designed to determine who is entitled to the proceeds of listed shares from then on. In practice, the regulation turned out to be unclear in parts. It has therefore been clarified that the registration date refers to the end of the business day on the date set by the issuer. On the basis of this date it can then be determined who is entitled to the dividend payments and therefore also to set-off, exemption, refund or reduction of dividend tax. Of course, the other conditions must also be met.
Note!
The record date serves only to designate the time when it must be determined who the proceeds creditor is. The provision does not define the term "proceeds creditor.
Austerity of parcel exchange exemption
The parcel exchange exemption in the transfer tax will no longer apply to homes except agricultural farm homes. Other structures will only qualify if they have been farmed for at least 10 years. If this continuation requirement is not met, transfer tax will still be due, unless the withdrawal from agriculture occurs through government intervention. These changes reduce the administrative burden and improve enforceability. The government also wants to prevent "parcel exchange constructions" with this.
Rolling back repeal of procurement facility
The repurchase of treasury shares is subject to dividend tax. There is a conditional exemption for the repurchase of own shares by a stock exchange fund. This exemption would expire on January 1, 2025, which would mean a deterioration of the competitive position of Dutch stock exchange funds compared to foreign stock exchange funds. The Tax Plan proposes not to abolish the buyback facility.
Adjustment of liquidation loss scheme
The liquidation loss rule determines whether a loss on the liquidation of a subsidiary is deductible for income tax purposes. Two changes to the liquidation loss rule are proposed. The first change involves including a subsequent markup of a claim against the subsidiary when calculating the liquidation loss. The second changes the law so that non-deductible sales losses on an indirectly held subsidiary are not convertible into deductible liquidation losses on a directly held subsidiary.
Increase threshold interest deduction limitation
When determining taxable profit for corporate income tax purposes, interest is not deductible to the extent it exceeds the greater of (now) 20% of adjusted profit or €1,000,000. It is proposed to increase the percentage of this interest deduction limitation (earnings stripping measure) to 25%. The change partially reverses an earlier tightening and brings the percentage more in line with the European average. With this, the government wants to improve the Dutch business climate.
Tip
Assess the financing structure within the company. This is because the increased threshold provides more room for deduction.
Adjustment of remission profit scheme
Due to the 2022 limitation on loss relief, companies with more than €1,000,000 in deductible losses and taxable profits (including remission profits) of more than €1,000,000 always pay corporate income tax. This can hinder the conclusion of an agreement with creditors. Therefore, the remission profit exemption in corporate income tax is adjusted. If the company has more than €1,000,000 in deductible losses, the remission profit in that year will be fully exempt to the extent that it exceeds the other losses in the year.
Note!
If the available carry-forward losses are less than €1,000,000, then the remission gain is exempt only to the extent that it exceeds the available losses.
Facilities sibling merger
Simplified outright sister mergers, where a shareholder owns all the shares of the companies to be merged, will also begin to qualify for the tax pass-through facilities. This will prevent tax obstacles for substantial interest holders in these mergers. The existing approval is thus enshrined in legislation. In the case of indirect sister mergers, the regulation will not be adjusted because there appears to be less need for it in practice and the complexity is greater.
Mandatory dividend tax exemption
Dividend tax has several exemptions that are optional, such as in participation situations or within fiscal unity. The entity paying dividends can choose to apply or not apply the exemption. This makes the revenue owner dependent on the choice of the body. It is proposed to eliminate this option. If one meets the conditions for the exemption, then it is mandatory to apply it. Dividend tax will then no longer have to be withheld and remitted, leaving the shareholder at no liquidity or interest disadvantage.
Deduction of work space expenses clarified
The deductibility of expenses for a non-self-contained workspace in a home that is part of the business assets is clarified. Tenant expenses such as, for example, furnishing costs, gas, water and light, are not deductible. The measure explicitly anchors case law and existing practice in the law.
Tip
Assess whether it is possible to convert the non-autonomous workspace into an independent workspace, then there is more room for expense deduction.
Adjustment measure excessive borrowing
Since 2023, DMSs can no longer borrow more than €500,000 from their own company without tax consequences. However, an unintended consequence of this measure has led to double counting of loans in partnerships, such as vof's and cv's. These double counts are now prevented. It also prevents debts being taken into account for more than nominal value.
Tip
This measure takes effect retroactively on Jan. 1, 2023. So check existing partnerships and debts carefully as well to avoid unjustified double counting.
Gift deduction bv expires
The gift deduction in corporate income tax (Vpb) and the "corporate giving" regulation will be abolished. From January 1, 2025, companies can no longer deduct donations to charities from their profits. This applies both to donations deduction in Vpb and to donations from companies following shareholder motives. Sponsorship and Corporate Social Responsibility will remain deductible as business expenses.
Note!
Businesses should review and possibly restructure their donations starting in 2025 to optimize tax benefits. Consider corporate sponsorship as an alternative.
Box 2 rate reduced to 31%
The government is reversing the increase in the Box 2 rate in the second bracket. This rate went up to 33% on January 1, 2024, but will be reduced again to 31%. With this, the government wants to bring the tax burden on substantial interest holders more in line with that of employees and IB entrepreneurs. The goal is to limit tax-driven legal form choices.
Tip
It may be fiscally advantageous to defer a dividend payment until 2025.
BUSINESS SUCCESSION ALLOWANCES
BOR
If business assets are transferred by gift or inheritance, this may result in the levy of gift or inheritance tax. To prevent the continuity of a company from being jeopardized as a result, the business succession regulation (BOR) can be used. As a result, no or less inheritance or gift tax is due.
Pass-through arrangements
The transfer of business assets often results in the imposition of income tax. There are various pass-through arrangements (DSR) that ensure that this levy is deferred in certain situations so that the continuity of the business is not jeopardized. One such pass-through scheme specifically targets the gift of a substantial interest (the DSR ab). A substantial interest is, simply put, an interest representing at least 5% of the (type of) shares in a company.
Limitation of qualifying interests
The BOR and DSR ab will be limited to direct and indirect equity interests of at least 5% of the total issued share capital with effect from January 1, 2026. Only ordinary (regular) shares will still qualify, regardless of whether those shares carry voting rights. Smaller interests, options, profit certificates and tracking stocks are excluded from the schemes. A usufruct or bare ownership of common shares may still qualify. The purpose of the changes is to limit the arrangements to shares with sufficient enterprise risk.
Tip
The BOR and DSR ab continue to apply to preferred shares issued as part of a phased business succession.
Corrections previous legislative changes
As of Jan. 1, 2024, changes were made to the BOR and DSR ab that have unwanted consequences. For example, the presence of loan capital can lead to an incorrect calculation of the exemption in the BOR or to negative qualifying business assets. To correct this, some parts of the law will be slightly amended.
Possession and continuation requirement BOR
The BOR can only be applied if a transferee continues the business for five years. This period changes to three years. Bottlenecks in the possession and continuation requirement that relate to changes in the legal shell of a company, such as the contribution of a sole proprietorship to a PLC, are resolved. If the subjective entitlement to the business does not increase (possession requirement) or decrease (continuation requirement), this should not be an obstacle to application of the BOR. The requirements for mergers and the like will also be relaxed, so that no new possession period will commence if the economic entitlement to the company remains the same.
Tip
Contrary to previous reports, the shorter continuation period will already begin to apply to acquisitions occurring from Jan. 1, 2025 (not 2026).
Note!
The proposals to resolve the various bottlenecks will take effect Jan. 1, 2026.
Heavier property requirement for state pensioner
The possession period in the BOR will be extended for older testators and donors effective January 1, 2026. This does not apply to businesses that a testator or donor started no later than two years after reaching the state pension age. For a testator, the possession period is extended by six months for each year that the testator is two years older than the state pension age at the time of death. For a donor, the possession period is extended by six months for each year that the donor is more than six years older than the state pension age at the time of the gift.
Repeated use BOR
Businesses are sometimes transferred multiple times within a family (and sometimes through third parties) in order to achieve an untaxed wealth transfer. For example, parents donate a business to a child with application of the BOR. Later, the company is bought back and donated again under the BOR. Effective January 1, 2026, there will be a measure that excludes the BOR in situations where the business has already been owned by the transferee at some earlier time. The exclusion will be up to the amount of the purchase price for the business assets.
Note!
The anti-abuse measure will be broad and will also apply, for example, if the company's activities have changed or its legal form has been modified.
Diluted and petty family interests
It was previously announced that effective January 1, 2025, the dilution regime for the BOR and DSR ab and access for small family interests to the BOR will be expanded. These adjustments require approval from the European Commission. The effective date has therefore been postponed to a time yet to be determined.
Preferred shares
Preferred shares are often issued as part of a business succession, but the definition of preferred shares often leads to ambiguity. It has been proposed to designate preferred shares as shares with priority over profit distribution or liquidation proceeds. This means that the risk of a preferred share is lower than the risk of an ordinary share. Incidentally, the priority must be substantial. This is not the case, for example, if the paid-in share premium has priority and the nominal paid-in capital does not.
Tip
The proposed definition is largely consistent with the Tax Administration's current implementation practice. Thus, the impact of this change is limited.
Note!
The definition will be included in the law as of Jan. 1, 2026, and will be further developed.
EMPLOYER
Repair levy leak Belgian seafarer
Based on current law, in rare situations, the Netherlands cannot levy tax on a Belgian resident who is employed as a seafarer by a Dutch employer and works entirely outside the Netherlands. This will be repaired for those cases where the Netherlands is competent to levy tax under international treaties. This bill already takes into account additional agreements that the Netherlands intends to make with other countries regarding the attribution of wages to so-called home working days.
Exempt private use OV card
The Cabinet proposes to clarify the measure ' targeted exemption public transport season tickets'. If an employer gives an employee the option of free travel or discounted travel at his expense, then these costs will be targeted exempt, provided some business use takes place. Thus, the targeted exemption also applies to private travel with a right to free travel or a right to discount from the employer. The targeted exemption has also been extended to non-Dutch public transportation.
Note!
The targeted exemption does not apply to private trips made with a private public transport card. The same trip made with an employer's public transport card may be exempt.
Maturity of contribution limit pension
The tax contribution limit for accruing old-age and spouse's pensions in the event of death on or after retirement date remains 30%, but the calculation is adjusted. Instead of a duration of 100 years, it is now set by law at 60 years. This provides a more accurate return expectation that more closely matches the original calculations in the Future Pensions Act. The change works back through Oct. 1, 2024.
Authority to change R&D deduction
Companies can receive a tax credit on research and development (R&D) work. To date, the R&D percentages and bracket limits are tied to legislative changes. It is proposed to make the scheme more flexible whereby the Minister of Economic Affairs can change the scheme more easily. Based on the proposal, the minister can change both the limit amounts and the deduction percentages.
Reverse ouster of 30% scheme
The 2024 retrenchment of the 30% scheme (30-20-10 scheme) will be partially reversed. Starting January 1, 2027, the maximum untaxed compensation will be 27%. For 2025 and 2026, the rate will remain 30% for all incoming employees. The salary standard increases to €50,436 and to €38,338 for employees under 30 with a master's degree. Incoming employees who used the 30% scheme before 2024 are subject to transitional rules. For them, a percentage of 30% and the old (indexed) salary standards will continue to apply until the end of the term.
VAT & EXCISE DUTIES
Penalty provision General Customs Law
Customs performs tasks covered by the General Act on State Taxes (AWR) and the General Customs Act (Adw). Therefore, the Adw will be brought into line with the AWR. This achieves that the inspector imposing fines under the Adw applies the same rules as when imposing fines under the AWR. Among other things, this change ensures that the inspector who handles the return and finds a violation can also impose a fine. And that after an omission penalty, an offense penalty can be imposed for the same offense if new objections have become known.
Revocation of excise permits
The proposed amendment to the Excise Tax Act will make it possible to revoke a distillery permit and a tobacco production device permit. In fact, under the current arrangement, this is not possible, leading to a cluttered permit file with permits that are no longer being used. This change allows Customs to monitor this more effectively.
Expired fuel excise tax adjustment
The proposal is to eliminate the provisions around after-tax and refund of excise duty on excisable fuel stocks. These rules are impracticable for Customs and cause ambiguity for businesses. The measure simplifies the Excise Tax Act and brings more clarity for the future.
Review of VAT investment services
Effective January 1, 2026, the VAT review regime will be extended to investment services for immovable property. VAT on these services will be tracked for five years, similar to movable investment goods. A threshold amount of €30,000 applies. Smaller services are therefore not covered by this regulation.
Tip
This measure allows some entrepreneurs to deduct previously non-deducted VAT as input tax.
Note!
This measure may lead to revision VAT for entrepreneurs who - after the first year of taxed use - start renting out the property exempt within the revision period.
21% VAT for certain services
From Jan. 1, 2026, the reduced VAT rate for lodging and certain cultural goods and services will be abolished. This means that the VAT rate will increase from 9% to 21%. This applies - not exhaustively - at least to: hotels, guesthouses, books, sports, museums, music and theater performances. Camping, amusement parks, play and ornamental gardens, circuses, zoos and cinemas are excluded from this increase.
Note!
The VAT rate at the time of the performance applies. For example, if a theater performance is paid in advance in 2025 but takes place in 2026, 21% VAT is due.
FIXED
Expanding starter exemption
The starter exemption and the reduced transfer tax rate are extended to the acquisition of beneficial ownership of owner-occupied homes. In the future, both the starter exemption and the reduced rate can be applied to cases where beneficial ownership is acquired, as long as the other conditions are met.
Note!
If the starter exemption was used when acquiring beneficial ownership, it cannot be used again when later acquiring legal ownership.
Expansion of VoV exemption
When repurchasing homes in the context of "conditional sale" (VoV), the so-called VoV exemption can be applied. The VoV exemption is extended to 'appurtenances' to homes, such as barns and garage boxes, which are acquired simultaneously with the home.
At most 8% transfer tax for homes
The government aims to increase the supply of rental housing so that more citizens have access to affordable housing. Therefore, the proposal is to reduce the regular transfer tax rate with respect to the acquisition of homes from 10.4% to 8% effective January 1, 2026. For a home that the buyer is going to occupy himself for a long period of time, the (existing) reduced rate of 2% or the starter exemption will continue to apply.
Simplification of rent allowance
The rent subsidy will be simplified so that the rent subsidy will soon have only the distinction between single- and multi-person households. In addition, the income-dependent reduction of the rent allowance will be simplified. Housing benefit recipients will soon be better able to assess the consequences of a higher income, and marginal pressure will decrease for most housing benefit recipients. In 2026, the co-payment will be reduced.
Gan OVB by key agreement
Key agreements that normally result in beneficial ownership of a property are excluded from transfer tax (OVB). This is subject to the following requirements:
- The key agreement must be related to the commitment agreement for delivery of the property.
- Legal ownership must be transferred within six months of the key agreement.
- The start-up exemption or the 2% rate must apply.
Thus, there is no longer a taxable acquisition prior to the (legal) acquisition.
CAR & MOBILITY
Tax credit for emission-free cars
Owners of zero-emission vehicles currently pay no motor vehicle tax, and a quarter rate applies from Jan. 1, 2025. However, this discount ends on Jan. 1, 2026, after which the motor vehicle tax for electric cars becomes higher than for comparable gasoline cars. To prevent stagnation in the growth of zero-emission cars, a new motor vehicle tax rate discount of 25% will be introduced from January 1, 2026. This discount will apply until 2030 and will be applied to both the state and provincial surcharges. This should make the purchase of new and used electric cars more attractive.
Continuous use van
If, due to the nature of the work, a delivery van is continuously used alternately by two or more employees, it is often difficult to determine whether and to whom the delivery van has been made available for private use. Instead of taking an additional taxable benefit from the employees, the employer can pay a fixed amount of €300 per year via the final tax levy. This amount has not changed since 2006. This amount goes to € 438 per year and will be indexed annually as of January 1, 2026, so that it better reflects the actual amount of the private benefit.
Note!
Ensure that the increase in the final tax is reflected (annually) in the payroll records.
End of special BPM rate PHEVs
The 1992 Tax on Passenger Cars and Motorcycles Act (BPM) has had a specific rate table for plug-in hybrid vehicles (PHEVs) since Jan. 1, 2017, to reduce the difference between tested and actual CO2-emissions.
Due to recent European regulations, CO2-measurement method for PHEVs adjusted, making emissions figures more realistic. From 2025, the specific PHEV tariff table will disappear and PHEVs will be taxed under the regular BPM rates for passenger cars. This may result in higher taxation for PHEVs with the new type approval, but makes the system simpler and more in line with actual emissions.
End of BPM exemption for vans
The BPM exemption for entrepreneurs' vans will expire. The BPM basis shifts to CO2-emissions. For vans with no established CO2-value, a flat rate of 330 grams per kilometer will be applied. In addition, the refund scheme for vans owned by the disabled will be improved. The BPM can be set off against the refund upon registration, thus preventing pre-financing by the disabled. These measures ensure more effective taxation and are more in line with practice.
Tip
Check that your vans comply with the new CO2-rules to avoid additional costs.
New vehicle definitions
The Tax Plan 2025 aims to simplify car taxes by harmonizing tax vehicle definitions with RDW registrations. This means that from 2027, tax vehicle definitions will match the RDW registration definitions, eliminating differences between, for example, passenger cars and vans. This will simplify car taxes and reduce the administrative burden for citizens and businesses.
Note!
Check the new vehicle definitions carefully to understand how they affect car taxes. This can be important for both individuals and business owners.
Request procedure zero rate buses
Natural gas or LPG buses used primarily for public transportation currently benefit from a zero rate of motor vehicle tax. When changing the registration of these buses, ambiguity may arise about (the moment of) the application of this rate. To ensure that the zero rate is correctly applied, the holder of the bus must submit a request to the inspector. This request is necessary to ensure that the rate is applied as of the correct time.
Note!
Make sure to submit a request to the inspector if the registration of the bus changes to avoid problems with the zero rate.
Tip
A request is only necessary for a bus registered after the 2025 Tax Plan comes into effect.
(HIGH NET WORTH) INDIVIDUALS
IB 2025 non-AOW rates
Taxpayers who have not reached state pension age at the beginning of 2025 are expected to face the following rate brackets in 2025:
Income tax 2025 | |||
Box 1 | Bel.ink. over (€) | but no more than (€) | Rate 2025 (%) |
Disc 1 | 38.441 | 35,82% | |
Disc 2 | 38.441 | 76.814 | 37,48% |
Disc 3 | 76.814 | 49,50% | |
Income tax 2024 | |||
Box 1 | Bel.ink. over (€) | but no more than (€) | Rate 2024 (%) |
Disc 1 | 38.098 | 36,97% | |
Disc 2 | 38.098 | 75.518 | 36,97% |
Disc 3 | 75.518 | 49,50% | |
These rates include national insurance contributions. A different rate structure applies to those with fewer or no national insurance contributions.
Note!
The combined rate adjustments for the years 2026 through 2029 are:
First tranche | Second slice | |
2026 | -0,22% | 0,03% |
2027 | -0,09% | 0,03% |
2028 | -0,15% | -0,10% |
2029 | -0,05% | -0,05% |
Rates IB 2025 state pensioner
Taxpayers who have reached state pension age at the beginning of 2025 and were born after 1946 are expected to face the following rate brackets in 2025:
Income tax 2025 (state pensioners) | |||
Box 1 | Bel.ink. over (€) | but no more than (€) | Rate 2025 (%) |
Disc 1 | 38.441* | 17,92% | |
Disc 2 | 38.441 | 76.814 | 37,48% |
Disc 3 | 76.814 | 49,50% | |
*Born before 1946: bracket 1 up to €40,502
Income tax 2024 (state pensioners) | |||
Box 1 | Bel.ink. over (€) | but no more than (€) | Rate 2024 (%) |
Disc 1 | 38.098* | 19,07% | |
Disc 2 | 38.098 | 75.518 | 36,97% |
Disc 3 | 75.518 | 49,50% | |
* Born before 1946: bracket 1 up to €40,021
These rates include national insurance contributions. A different rate structure applies to those with fewer or no national insurance contributions.
Modified tax credits
Below are the expected tax credits for 2025. With the exception of the elderly tax credit and single elderly tax credit, these are tax credits for taxpayers younger than the state pension age. Lower maximums apply to people older than the state pension age.
Tax credits | 2025 (€) | 2024 (€) |
General tax credit maximum | 3.068 | 3.362 |
Labor discount maximum | 5.599 | 5.532 |
Income-dependent combination discount maximum | 2.986 | 2.950 |
Youth Disability Discount | 909 | 898 |
Elder discount | 2.035 | 2.010 |
Single senior citizen credit | 531 | 524 |
The phase-out of the general tax credit will be linked to the statutory minimum wage (WML). As a result, taxpayers with an income up to the WML will retain the maximum discount.
Deduct transportation as a healthcare expense
Transport costs for obtaining medical assistance and aids can be deducted as care costs. Because of simplicity, it is proposed to assume €0.23 per kilometer if traveling by car (not cab). For other transportation, such as cab or public transport, the actual costs remain deductible. In addition, for excessive transportation costs due to illness or disability, a deduction of € 925 per year is proposed, provided that the taxpayer can convincingly demonstrate his inability to walk more than 100 meters on his own, in accordance with the disabled parking card and the OV companion card.
Tax solution for single earners
Without an additional measure, the income of some single-earner households falls below the social minimum due to a confluence of schemes.
As a solution, it is proposed that the unused (fully) general tax credit be paid in part to the least-earning partner born on or after January 1, 1963. A number of additional conditions must be met. This measure may not be introduced until January 1, 2028. Therefore, for the years 2025 through 2027, a temporary allowance will be provided to this type of household by the municipality.
Note!
This measure requires, among other things, that the family income be less than €48,500 gross. This is an estimated amount for the year 2028.
Simplified objection to surcharges
An objection to the established amount of an allowance will henceforth also be an objection to the related recovery decision announced in the same letter. From now on, an objection to a recovery decision will also be an objection to the related established amount of an allowance announced in the same letter. This increases legal certainty for citizens and reduces the administrative burden.
Note!
These measures do not apply if the objection states that only the determination of the allowance or the recovery is being objected to.
Visits of long-term caregivers
For the deduction of travel expenses for visiting a long-term caregiver, the visitor must have a joint household with the caregiver at the onset of the illness or disability. That touch point may prove unreasonable in certain cases. It is therefore proposed to change that moment of review so that a test of whether the visitor had a joint household with the person being nursed is made at the start of the nursing care. That moment is also more verifiable for the tax authorities on the basis of the basic registration of persons.
Box 3 rules for actual returns
New legislation with rules for determining the actual return in Box 3 is still to come. Those rules are needed because the Supreme Court has ruled that if the actual return in Box 3 is lower than the standard return, tax should be levied on the actual return. The new rules cover the years starting in 2017 and are important for taxpayers with box 3 income who can appeal the Supreme Court rulings.
Note!
The new rules are scheduled to be implemented by June 1, 2025.
Box 3 exemption for earthquake damage compensation
Claims for restoration of earthquake damage in Groningen and Drenthe and similar property rights will be subject to an exemption in box 3. This change will not yet be able to be reflected in the preliminary income tax assessment 2025. The exemption does not apply to damages paid in cash.
Tip
This special box 3 exemption works partly back through July 1, 2020, and partly through July 1, 2023.
Waiver gains and surcharges
When a business debt is discharged, the entrepreneur earns a profit. For income tax purposes, those profits are exempt or offset against offsettable losses. For benefits, however, offsettable losses are not taken into account. A waiver in that situation can therefore result in no or a lower entitlement to benefits.
This is undesirable. Therefore, in such situations, at the taxpayer's request, remission gains that are not fully exempted from income tax due to losses to be carried forward are not taken into account in the allowances.
Note!
This is a specific arrangement and does not mean that other paper income can also be disregarded for benefits.
Age of allowance partnership
Currently, parent and adult child or foster child, age 27 and older are considered supplemental partners. This can lead to lower supplements when cohabiting. It is therefore proposed that the age limit of 27 years be removed for first-degree relatives by blood and marriage when determining allowance partnership.
Note!
The Internal Revenue Service applies the age limit of 27 years, which means that first-degree relatives by blood and marriage remain partners for tax purposes, but thus are no longer benefits partners for benefits purposes.
INTERNATIONAL SITUATIONS
Corporate tax subject tests
In corporate income tax, several (anti-abuse) provisions use subjectivity tests to determine whether a taxpayer pays sufficient tax. The proposed amendment clarifies that a qualifying Pillar 2 withholding tax also counts toward some of the subjectivity tests. Pillar 2 ensures that multinational groups and domestic groups with sales of at least €750 million pay at least effective 15% in tax on their profits. This includes rules on interest deduction limitation, participation and object exemption.
Tip
A tax advisor can identify whether the changes will affect the existing structure.
Object exemption permanent establishments
The object exemption for foreign business profits is adjusted to prevent double taxation in the case of permanent establishments that are taxed in the Netherlands but are not recognized as permanent establishments in other countries. With this adjustment, the exemption is now applied even if the profits are subject to tax abroad. This prevents unintended double taxation due to mismatches in the recognition of permanent establishments.
General anti-abuse provision ATAD1
The Netherlands is transposing the general anti-abuse provision (GAAR) from ATAD1 into national legislation. During the implementation of ATAD1 in 2019, it was chosen not to do so because the GAAR was already incorporated into Dutch law through the doctrine of fraus legis. Now that the European Commission has explicitly requested implementation of GAAR, the Netherlands is complying with this request.
Amendments to the 2024 Minimum Tax Act
The Minimum Tax Law 2024 (WMB) is an implementation of the EU Directive. Remaining topics from administrative guidelines, which require a legal basis, are included in the WMB, as well as some technical amendments. These include regulations on qualifying interest, qualifying negotiable tax credits, currency conversion, domestic withholding tax, accrued excess negative tax expense, the excluded income based on real presence, the temporary Country-by-Country Reporting safe harbor rule and formal law aspects.
New group concept of withholding tax
The Netherlands levies a withholding tax on interest, royalties and dividends paid to an affiliated entity located in a low-tax country. The withholding tax applies if there is a qualifying interest. This may also be the case if there is a cooperating group. The term 'cooperating group' will be replaced by the group term: qualifying entity. This is the case if entities act jointly with the main objective (or one of the main objectives) to avoid taxation of one of the entities.
Tip
The burden of proof that there is a qualifying unit is on the inspector, but in case of doubt it is advisable to enter into preliminary consultations. This provides certainty in advance.
International value transfer
In 2023, the European Court of Justice handed down rulings on the international transfer of value of pension when a job change occurs. In response, the law is being amended on international value transfer of pension. These amendments, effective Nov. 16, 2023, ensure that the conditions for value transfer are in line with European law. Two important conditions will be removed: i) the obligation for foreign pension funds to accept liability and ii) the restriction on surrender options abroad.
Note!
The condition of no wider redemption possibilities abroad than under national law continues to apply to individual value transfers outside the EU, EEA and Switzerland.
ENERGY & ENVIRONMENT
Energy tax reduction
The tax credit for electricity will be increased to €521.81 retroactively through January 1, 2024. This measure replaces the phase-out of the reduced rate for shore power, which would result in an insignificant benefit of up to 3.6 cents per year for electricity consumers. By increasing the tax credit, the benefit is given to consumers in a simpler way, without additional burdens on energy suppliers and the Tax Administration. For the period from 2025 to 2033, the tax credit will also be increased.
CO2-levy greenhouse horticulture
The Greenhouse Horticulture Tax Measures Act brings three important changes. First, it changes the definition of energy companies: only companies that supply at least 75% of their natural gas-generated heat to greenhouse horticulture companies will be taxable. Second, the rate path of the CO2-tax is reduced, with a new rate structure that is revised every year according to current data. Finally, the implementation of the CO2-tax on greenhouse horticulture goes from the Minister of Agriculture, Nature and Food Quality (LNV) to the Tax Department.
Note!
The cabinet plans to decide in spring 2025 on the extension of the European Emission Trading Scheme (ETS2) to the greenhouse horticulture sector and its impact on CO2-levy.
Prolongation of low fuel taxes
The reduction in excise duty rates for unleaded gasoline, diesel and LPG that began on April 1, 2022, will remain in effect through December 31, 2025. This measure keeps the rates the same as July 1, 2023 and avoids indexation, making the reduction broader than before. This policy is aimed at easing fuel costs for households and businesses and gives them more time to adapt to changing economic conditions.
Note!
If the extension does not go through, rates could rise significantly in 2025. They now total €0.18473 (unleaded gasoline), €0.11964 (diesel) and €0.04362 (LPG).
Abolition of balancing scheme
End customers with small installations currently receive the same rate (supply costs, energy tax and VAT) for imported electricity as for extracted electricity. In 2024, this is a tax benefit of about €0.167 (energy tax and VAT) per netted kWh. This benefit is going to expire. The government proposes that from 2027, electricity supplied back will no longer be netted against electricity supplied. There is supervision that the compensation for the electricity supplied back is transparent and reasonable. This compensation cannot be negative.
Note!
When calculating the return on solar panels, take into account the expiration of the net-metering scheme as of 2027.
Natural gas energy tax reduction
The energy tax on natural gas will be reduced for consumption up to 170,000 m³. This reduction starts at 2.8 cents per m³ in 2025 and rises to 4.8 cents per m³ in 2030. Households with an average consumption of 1,050 m³ will thereby save about €29 per year in 2025, rising to about €50 in 2030. Businesses also benefit from lower costs due to this adjustment in tax rates.
Separate rate hydrogen
Starting January 1, 2026, hydrogen will be taxed lower in energy taxes than natural gas. This encourages the use of hydrogen as a renewable energy source and supports the energy transition. In addition, the exemption for making hydrogen via electricity will be clarified and extended. These measures promote the development of the hydrogen market, create new opportunities for economic growth and employment, and strengthen the competitive position of the Netherlands.
Note!
The reduced rate will be evaluated no later than 2030. In case of a negative evaluation, the separate rate will expire on Jan. 1, 2031.
Abolition of coal tax exemption
Companies that import, transport or store coal must pay coal taxes. Coal tax revenues are low. The Cabinet proposes to abolish exemptions for dual and non-energy use of coal by 2027. The refund scheme, through which unapplied exemptions are reclaimed, will also be abolished. This scheme will remain available to old cases for five years after its abolition. The objective of ending the exemptions is twofold: to reduce coal use in the Netherlands and to realize more tax revenue.
Note!
File a coal tax refund claim in time before the scheme finally expires.
Levy AVIs
Due to various legislative changes, waste-to-energy incinerators (WWTPs) have been included in both the definition of WWTP and the definition of greenhouse gas facility since 2024. To avoid confusion about the CO2-levy, from now on MSWs will be specifically treated as MSWs. This will avoid double regulation and ambiguity about tariffs.
Note!
For 2024, the ambiguity remains. The more favorable rate for GHG plants will apply to MSWs before 2024.
Waste tax clarification
The in/out method for waste tax is clarified. CO2-emissions released through the chimney after incineration may not be deducted from the tax base for the waste tax. Instead, the in/out method encourages the prevention of waste incineration and pollution, which is made more explicit with this change in the law.
Adjustment of greenhouse tax rules
The taxation rules for natural gas and electricity in the greenhouse industry are being adjusted. Currently, there is an exemption for electricity generated with an efficiency of at least 30% and through cogeneration. These exemptions will be limited and henceforth based on the electrical capacity of installations. Installations with more than 20 megawatts of electrical capacity will become taxable, while medium-sized installations will remain exempt. This ensures more uniform control and application of the rules.
Tip
Check whether an installation falls within the new limit to avoid unexpected tax charges.
Plastic tax, diesel and airline tax
Several tax measures from the outline agreement were also not included in the 2025 Tax Plan. The introduction of a circular plastic tax, the reintroduction of red diesel for agriculture and the differentiation of the air passenger tax by travel distance. These measures will be worked out later because they are complex and, according to the Cabinet, require a careful policy process and considered parliamentary consideration.
AVI correction factor for CO2-levy
The CO2-tax for industry, in place since 2021, is being tightened with the introduction of an AVI correction factor. This measure reduces the number of dispensation rights for waste incinerators (WWTPs) by 1 Mton by 2030, strengthening the incentive to reduce CO2-emissions. The correction factor will be phased in starting in 2026 to allow the sector to adjust. After 2030, the correction factor will remain in place to support the broader goals of the CO2-levy: reducing greenhouse gases and promoting the circular economy.
Note!
WWTPs should prepare for the more stringent emission rules in a timely manner and take measures to reduce their CO2-emissions.
OTHER MEASURES
More flexible determination of tax interest
The proposed amendment should ensure that tax interest rates can be set more flexibly in the future. If it is desirable to allow the percentage of tax interest to be reimbursed to be different from the percentage of tax interest to be charged, this will no longer require a legislative amendment, a general order in council will suffice.
Extension of penalty period for third parties
The penalty period for third parties, such as advisors and accomplices, will be extended to 12 years if an extended post-recovery or post-taxation period also applies to the taxpayer concerned itself. This will prevent that third parties involved can no longer be fined, while the taxpayer can still be dealt with within the extended period. For existing cases, transitional law will apply.
Real estate measure FBIs tightened
The Tax Plan 2025 includes a measure that ensures that a fiscal investment institution (FBI) can no longer invest directly in Dutch real estate: the real estate measure. If an FBI still invests directly in Dutch real estate on January 1, 2025, the FBI will not be able to apply the special corporate income tax regime for FBIs. This measure will be followed by further amendments to close a loophole and to give substance to the term "real estate." The exact amendment proposals are not known at this time.
Tip
Make sure the FBI complies with the new rules around investment property in time to avoid losing the favorable corporate tax rate for FBIs.
Compensation in WOZ and BPM objection cases.
To discourage the revenue model of no-cure-no-pay agencies, the litigation fee for WOZ and BPM objection cases has been reduced to 25% from January 1, 2024. The Supreme Court has ruled that the low litigation fee rate for tax and premium cases should remain inapplicable. As a result, the rate for other cases will apply, and that rate is currently double. To bring the amount of the fee back in line with the intent of the legislature, it is proposed to reduce the litigation fee for WOZ and BPM cases to 12.5%.
Refund without declaration
The Cabinet is still coming up with a bill to make it possible to also determine an income tax assessment with a zero amount payable or a refund in case the taxpayer has failed to file his/her return. This is in the interest of the citizen who does not respond to the request to file a tax return while being entitled to a tax refund.
Note!
It is always wise to do respond to a request to file a tax return in a timely manner.
Treatment of foreign legal forms
The tax treatment of various foreign legal forms, as well as for a number of Dutch legal forms, is changing. This means, for example, the end of the independent tax liability for the open limited partnership and similar partnerships. Now some refinements to this bill are being made. For example, the introduction of the change in the tax treatment of various legal forms unintentionally limited the scope of the deduction limitation for grants and issuances of shares and option rights within a group. Such omissions are now being corrected.
Tip
In principle, the loss of corporate tax liability of an open limited partnership, for example, results in a tax settlement. But by certain means, such as a facilitated stock merger, the tax claim can be passed on.
Gambling tax increase
The gaming tax rate will be sharply increased from 30.5% to 34.2%, only to be further increased to 37.8% on Jan. 1, 2026.
Recovery interest on loss relief
A tax assessment must be paid within the appropriate period. If that deadline is exceeded, collection interest is charged. A change in the law in 2013 inadvertently removed a regulation. This removed the legal basis to recalculate recovery interest when loss relief is applied. This regulation is now being reinstated in the law so that, the regulation is again in line with the pre-2013 situation. In connection with the necessary change in automation, this change will - it is expected - not be able to take effect until January 1, 2027.
Note!
For years, the Tax Administration mistakenly did not recalculate recovery interest after loss relief. In 2021, the Tax Administration launched a remedial action to rectify this.
BES Islands
The following changes are proposed for the BES Islands tax system:
- The duration of the investment credit in the property tax (no levy on the increased capital gains of real estate) is shortened from 10 to five years.
- The property tax rate for real estate in which a hotel business is conducted is increased from 10% to 11%.
- The revenue tax rate is increased from 5% to 7.5%.
- The amount of the small business scheme will be indexed annually starting in 2025.
- The transfer tax fixes some erroneous references.
- There will be a separate transition rule for some formal deadlines when an accounting year ends before March 31, 2025.
- Income tax concepts of "own home" and "wages" are tightened.
- The income tax free allowance will be linked to the legal minimum wage.
- The income tax rate structure is being changed.
- The rate for substantial interest gains in income tax will be increased from 5% to 7.5%.
- Several substantive and technical changes are being made to the payroll tax, including an adjustment to the wage concept.
- Notional employment is introduced for the partner of a substantial interest holder.
- The treatment of claims against savings and provident funds is modified.
- The declaration that withholding of tax may be omitted.
- A final tax regime is introduced for situations in which an after-tax assessment is imposed on the employer.
Increase in child budget
In order to improve the financial position of families in a targeted way, the government is increasing the child budget amount. In addition, the phase-out percentage will be increased incrementally each year to make the child budget more targeted.
No reduction in social benefits
The planned incremental reduction of some benefits at the social minimum will be paused for the next three years (2025, 2026 and 2027). As a result, these benefits will be higher through the end of 2038 than they would be without this proposal. This concerns social assistance, survivor's benefits and the supplement to the social minimum for single people with UWV benefits.
Note!
This is not an increase in benefits, but the removal of a proposed cut.
Wrongful rejection of debt settlement
From 2012 through March 2021, citizens' requests to cooperate in out-of-court debt settlement (MSNP requests) were rejected by the Tax Administration on one ground. It is incorrect that the Tax Administration has (automatically) rejected MSNP requests for one reason only. These are vulnerable citizens in whom the possibility of achieving a debt-free start has been unfairly restricted.
Therefore, a bill is being developed in which the government introduces a basis for the relief policy designed to accommodate affected citizens.
Previously submitted legislation, including:
- The margin scheme sales tax for antiques, art and collectibles can no longer be applied if a reseller has purchased the goods at a rate other than the general rate.
- The place of virtual services of a cultural, artistic, sporting, scientific, educational and entertainment nature for sales tax purposes is now where the customer (entrepreneur or non-entrepreneur) resides, is established or where the permanent establishment is.
- A number of agricultural goods are no longer subject to the low VAT rate.
- The small business allowance (KOR) in sales tax now applies within the entire EU.
- Foreign legal forms are taxed by the legal form comparison method in the same way as comparable Dutch legal forms.
- The open limited partnership is no longer independently subject to corporate income tax.
- A joint account fund is only liable for corporate income tax if it is an investment fund or fund for collective investment in securities within the meaning of the Financial Supervision Act. Proofs of participation must also be negotiable.
- There is still an investment institution exempt from corporate income tax only if it is an investment institution within the meaning of the Financial Supervision Act.
- The method of determining qualifying business assets, the extent of the exemption and the requirements on the transferee for the BOR/DSR ab change.
- The additional tax rate for an electric car is 17% on the first €30,000 and 22% on the value above €30,000.
- The self-employment deduction is further reduced to €2,470.
- The tax liability for BPM passes from the registered owner to the applicant.
- The levy and payment of BPM must be made prior to registration.
- The zero rate for passenger cars with a CO2emissions of 0 g/km will be replaced by a quarter-rate MRB. For passenger cars with CO2emissions greater than 0 g/km up to and including 50 g/km, a three-quarter rate of MRB applies.
- The labor cost benefit for low-income workers will expire. The labor cost benefit will also be phased out for older workers.
- The concurrence exemption in the transfer tax for share transactions will be adjusted. A rate of 4% will now apply if they are new real estate for sales tax purposes and are operated for less than 90% VAT.
New rules for payroll taxes as of 2024
Download the Payroll Taxes 2024 newsletter from the Internal Revenue Service. This newsletter informs you of the changes to payroll tax returns for 2024.
Download all rates, amounts and percentages of payroll taxes as of Jan. 1, 2024.
Source: tax authorities
In 2024, the WKR will be reduced
In 2023, the working allowance (WKR) is 3% up to a wage bill of €400,000 and above 1.18%. In 2024, the percentage is reduced to 1.92% up to €400,000 and over the excess the free allowance remains 1.18%. This may make it convenient to consider items that would potentially be reimbursed in 2024 as early as 2023.
Bonuses can be brought into the free space up to € 2,400 without substantiation. This applies to staff and to the DMS. This amount may be given freely, without payroll tax as far as the free space allows.
If you would like to take advantage of this, please contact our payroll specialist.
Arrange gift to ANBI before January 1
In corporate tax, it is now still possible to make a deductible annual gift of up to €100,000. This gift is deductible for 50% from the profit. If you want to make a gift to an ANBI through a private limited company, you can still use the gift deduction until January 1, 2024. The deduction will be processed through the 2023 corporate tax return.
Utilize annual space 2023
Annuity accrual was brought into line with the Pension Act in 2023, retroactive to Jan. 1. As a result, from 2023, the options for accumulating annuity capital have been widened. The main changes are as follows:
- The annual percentage allowance goes up from 13.3% to 30%.
- The reserve margin becomes a fixed amount of up to €38,000.
The deadline for the reserve space is extended from 7 to 10 years.
As a result, evaporated annual leave for the years 2013 and 2014 can still be used
Becoming.
Building up annuity capital can be interesting for the DMS as a pension provision or as a supplement to the pension for salaried employees. Please note that the premium must be deposited into an accrual product with an insurer or bank before December 31, 2023. For completeness, we note that some providers may apply a deadline for the deposit.
How much annuity capital can be built up in 2023 depends on the taxable income in Box 1 2022. If you want to know whether this is interesting in your personal situation and how much you can lay down, a calculation can be made.
Ask this question by Dec. 11 Monday so that you receive the outcome in a timely manner.
Rates of dividend payments from substantial interest change
Starting in 2024, the rates for dividend payments from a substantial interest will change. A substantial interest exists if you own more than 5% of the shares in a company. The taxation of the substantial interest is through Box 2.
Income in Box 2 Rate
< € 67,000 (for tax partners < € 134,000) 24.5%
> € 67,000 (for tax partners > € 134,000) 33%
For distributions up to €67,000, it is fiscally beneficial to make the distribution after December 31, 2023. For higher amounts, it may be more advantageous to make the distribution before year-end. Whether this is actually the case depends on the personal situation of the substantial interest holder and of the BV. For example, the BV must have sufficient liquidity and the reserves must meet the requirements for a dividend distribution.
If you would like to make a dividend distribution before the end of 2023, please contact your relationship manager. If you would like advice in advance, we are also happy to assist you with this.
All tax plans listed
Yesterday during Budget Day, the fiscal plans for 2024 were presented.
The measures announced include:
- purchasing power;
- increase excise tax rates;
- tightening the business succession regime (BOR);
- reduction SME profit exemption.
Below we have highlighted some important measures that may have tax implications for you. If you would like to see all Tax Plans, please click here.
Reduction in SME profit exemption
The government wants to reduce the SME profit exemption from 14% to 12.7%. The SME profit exemption reduces taxable profits. If the company incurs a loss, the SME profit exemption reduces the tax loss.
Mutual fund change
For a mutual fund (fgr) to remain independently taxable for corporate income tax purposes, it must meet a new condition as of Jan. 1, 2025. Namely, it will then have to be a qualifying investment fund or fund for collective investment in securities.
Share ownership must be evidenced by negotiable evidence of share ownership.
Reduction of free space working allowance
In 2023, the free margin for the work expense scheme will be 3% of the wage bill for tax purposes up to €400,000. Over the part of the wage bill for tax purposes that exceeds
€ 400,000, the free space is 1.18%. The law erroneously stated that the maximum amount of the free space in the first bracket in 2023 is €6,800 (instead of €12,000). This will be retroactively changed to
January 1, 2023 restored, which will make the maximum amount in the first bracket equal to 3% of €400,000.
From 2024, the percentage of the free space will be reduced from 3% to 1.92% on a taxable wage bill up to €400,000.
Correction deduction limit mortgage interest joint purchase of own home
Under current legislation, if partners decide to first purchase an owner-occupied home jointly and only then sell the home of one of the two partners, this can result in the deduction of (mortgage) interest being limited. It is proposed to amend the law with retroactive effect to Jan. 1, 2022, to prevent this unwanted interest deduction limitation.
Stricter testing of income-dependent combination credit in co-parenting case
The income-related combination credit (IACK) is a tax credit for single or least-earning partners who combine work and care for a child. With co-parenting, the care of the child must be shared equally by the co-parents. Due to a Supreme Court ruling, this was already the case for 78 days of care of the child in a calendar year by one of the co-parents. As of Jan. 1, 2024, co-parents must each care for the child at least 156 days of the calendar year.
New income tax rates 2024
Rates IB 2024 non-AOW worker
Taxpayers who have not reached state pension age at the beginning of 2024 are expected to face the following rate brackets in 2024.
Income tax rate 2024
Disc low rate €75,624 49.50%
Rates IB 2024 state pensioner
Disc rate 1 € 38,139 75,624 49.50%
* Born before 1946: bracket 1 up to €40,077
Tax Interest
Tax interest has been increased to 6% as of last July 1. One exception is corporate and withholding taxes.
Tax interest is the interest the tax authorities charge for missed interest. When you owe money to the tax authorities, chances are good that tax interest will be charged. This is also the case if you have requested a deferral.
- File your income tax return later than May 1 and the IRS imposes an assessment after
July 1, then you owe tax interest. - If you file the return after July 1, then tax interest will be charged anyway.
Income tax
To avoid incurring tax interest on income tax, it is important that the preliminary assessment be determined as realistically as possible.
Inheritance tax
As a survivor, make sure that the inheritance tax return or a request for a provisional return is filed as realistically as possible within 8 months of death. If the tax authorities agree, no tax interest will be charged.
Need any help?
Want to minimize tax interest as much as possible? Then enlist our help.
We know the rights and obligations of taxpayers as well as the IRS. Object? We are happy to assist you.
Recovery interest
Recovery interest is the interest charged by the Internal Revenue Service if you do not pay the amount of the assessment within the statutory payment period.
During the corona period, the interest rate was temporarily 0%, but has since returned to 3%. By 2024, even one percent will be added.
Avoid extra charges and so pay on time.
There is often confusion about the deductibility of purchased goods and services. If you use the goods or services for both business and personal use, the private use portion must be adjusted.
Laptop
Consider the laptop purchased for business but which you also use privately in the evening. Suppose the use is 80% business 20% private then you may only reclaim the VAT for 80%.
Phone and internet bill
The VAT from the portion of the phone and internet bill that you use privately may also not be fully allocated to the business. The VAT is not deductible anyway for:
- traffic fines
- VAT on hospitality expenses.
Are you unsure about the deductibility of VAT on goods or services purchased, or need help adjusting for private use? Then take contact with us.
Because of privacy protection and identity fraud, sole traders have received a new VAT identification number (VAT ID) from the Tax and Customs Administration since 2020. This number is no longer linked to the citizen service number (bsn). It is required by law to note the new VAT ID number on outgoing invoices and the website.
We recommend checking this to be sure. A Dutch VAT number starts with NL, followed by 9 digits, the letter B and another 2 digits. Example: NL123456789B01.
Savings, investments and other assets are reported in Box 3. The Tax Office always calculates a fixed (notional) return on those assets.
It probably hasn't escaped your notice that the Internal Revenue Service has changed the Box 3 rules quite a bit. Starting in 2026, the government will tax assets that match actual earnings. This could have quite an impact on your box 3.
In our Box 3 blog we will keep you updated on the latest on the changes announced by the government and how they will affect you.
Old-age provision
The director-major shareholder (DGA) of a company is obliged to receive a salary in line with the market. This obligation is also known as the customary pay rule.
The 2023 Tax Plan announces a change regarding this arrangement. The efficiency margin of 25% will be abolished as of Jan. 1, 2023.
If this margin was taken into account when determining the customary wage, the wage may need to be increased from 2023 to remain in line with the customary wage rule.
Abolition of efficiency margin effective Jan. 1, 2023
The director-major shareholder (DGA) of a company is obliged to receive a salary in line with the market. This obligation is also known as the customary pay rule.
The 2023 Tax Plan announces a change regarding this arrangement. The efficiency margin of 25% will be abolished as of Jan. 1, 2023.
If this margin was taken into account when determining the customary wage, the wage may need to be increased from 2023 to remain in line with the customary wage rule.
Non-objectors not entitled to compensation
Hopes that non-objectors will be compensated are dashed with the offer of the 2023 Tax Plan.
State Secretary Van Rij has indicated that ex officio requests for restoration of rights will be rejected. It is about legal redress in connection with the Box 3 Christmas ruling that concluded the 2017 and 2018 mass objection income tax procedure. The cabinet has decided not to offer legal redress to those who did not file a valid objection (the non-objectors), supported by the Supreme Court ruling of
May 20, 2022.
There are currently consultations between the Ministry of Finance, the Taxpayers Association and other professional organizations regarding objections, requests for ex officio reductions and proceedings by non-objectors. If, against all expectation, non-objectors do receive full or partial compensation, it is expected to be massive.
So you do not need to take any action at this time.
All Tax Plans Listed
Yesterday during Budget Day, the Tax Plans for 2023 were presented.
The measures announced include:
- purchasing power;
- A better balance between the burden on labor and wealth;
- increase in corporate income tax and
- An accelerated phaseout of the self-employment deduction.
Below we have highlighted some important measures that may have tax implications for you. If you would like to see all Tax Plans, please click here.
Accelerated phaseout of self-employment deduction
The self-employed deduction is accelerated to be phased out by €1,280 per year (including the phasing out already announced earlier on the basis of the Tax Plan 2020 and the Tax Plan 2021). The self-employed deduction will be incrementally reduced from
€6,310 in 2022 to €900 in 2027. As of 2023, the self-employed deduction is €5,030.
Increase workfare
Employers can use the headroom under the working expenses scheme to provide and reimburse their employees with untaxed items. Currently, the free allowance for each employer is 1.7% of the first €400,000 of the wage bill and 1.18% of the excess. It has been proposed, due to inflation, to increase the free allowance (only) over the first €400,000 of the wage bill by 0.22%. This is a maximum of € 880 additional free room per employer.
Efficiency margin of customary pay
Dga's are required to award themselves wages from their own PLC. The minimum amount of that wage is determined based on the customary wage rule, which looks at, among other things, the wage from the most comparable employment. The salary of the dga may be at most 25% lower than this salary. This 25% is the efficiency margin. It has now been proposed to abolish the efficiency margin, so that dga's may have to award themselves a higher wage.
Zero VAT on solar panels
Currently, the supply and installation of solar panels is taxed at 21% VAT. The government wants to bring the supply and installation of solar panels at or on homes under the zero VAT rate from January 1, 2023. VAT will then no longer burden the purchase of solar panels. If the annual turnover of power supplies remains below €1,800, private solar panel owners will no longer have to register with the tax authorities from now on.
Empty value ratio to 100%
The value of rental properties with rent protection is determined by multiplying the WOZ value by the vacant value ratio. This is important for gift and inheritance tax and box 3 income tax purposes. It is proposed to use a ratio of 100% from 2023 for temporary leases and for rentals to related parties. This effectively abolishes the vacant value ratio in those situations.
New return basis
In the new calculation of the yield basis in Box 3, the benefit from savings and investments is based on the actual composition of assets. Three asset categories are distinguished: bank balances, debts and other assets. For each asset category, a separate fixed rate of return is proposed that matches as closely as possible the returns actually achieved.
The rates of return for the new calculation by category: Bank deposits (I) Other assets (II) Debts (III)
2017 0,25% 5,39% 3,43%
2018 0,12% 5,38% 3,20%
2019 0,08% 5,59% 3,00%
2020 0,04% 5,28% 2,74%
2021 0,01% 5,69% 2,46%
2022 – 5,53% –
Category I and III percentages for 2022 are not yet known.
Does your invoice meet the requirements?
If you have sold goods or services from your business then charges must be billed to the customer within 15 days of the month of delivery of product or service.
Keep in mind the stated billing requirements, such as:
- The proper listing of your customer's address information;
- your company name and address;
- Your own VAT identification number and Chamber of Commerce number;
- sequential invoice numbering;
- date you issue the invoice;
- clear description of the goods delivered or services performed;
- correct indication of the VAT rate and VAT amount. In case of different VAT rates, it is important to split this on the invoice;
- if your customer is located in another EU country and the VAT is transferred, include the customer's VAT number on the invoice. Always check first whether the number is valid. This can be done via this website.
In doubt about whether your invoice meets the requirements? Feel free to have your invoice reviewed by us review.
When to file sales tax returns?
For sales tax purposes, a distinction is made between the invoice system and the cash accounting system. In principle, every sales taxpayer falls under the invoice system. In some cases, your company falls under the cash accounting system.
Whenyour company under the invoice system You must file a sales tax return for all purchase and sales invoices that have a date falling within the relevant return period. The invoice date is leading. If, after submitting the sales tax return, you still submit invoices to us that relate to previously submitted periods, we will have to prepare a supplementary sales tax return.
When your company is under the cash system (e.g. hairdressers, hotel and catering businesses, window cleaners) then the moment of the money transaction is leading for the moment of declaration. Which companies fall under the cash system is regulated by law.
In short, make sure your records are complete for the period for which you have to file a tax return.
When in doubt, you can always contact with us.
Think carefully about the amount of your dividend payment
Think carefully about the amount of your dividend paymentGroenLinks and PvdA submitted an initiative bill with adjustments to Box 2.
This box contains income from substantial interest. Among other things, the bill provides that the rate in Box 2 will be divided into two graduated rates.
- For income up to €58,989 a rate of 25.96%
- With an income of € 58,989 and above, a rate of 40.59%
Presumably more will become clear about the implementation of the private member's bill on Prinsjesdag. If you intend to distribute a dividend greater than € 58,989 in the coming period, we recommend that you keep an eye on the news reports on this.
Of course, you can also consult us for appropriate advice. We are happy to be at your service.
Mortgage interest deductible after divorce only in case of (co-)ownership of the home
The Supreme Court has ruled that mortgage interest is deductible after divorce only in the event of (co-)ownership of the home
The case revolved around a divorced couple where the departing ex-partner continued to determine the mortgage interest even after the divorce. The remaining partner was the legal owner. According to the Supreme Court, for the application of the divorce rules, a taxpayer must also own at least part of the property in order for the property to be considered an 'owner-occupied home'.
If this plays out in your personal situation, please alert us to it. If possible, we will process the mortgage interest as 'alimony'. This ensures that the deduction is not lost.
Tax deductible or not?
We are regularly asked if computer glasses are tax deductible.
It is rare for computer glasses to be used only for business purposes by a DGA. For this reason, the Supreme Court has ruled that they are not tax deductible.
For employees, there is the possibility to include the computer glasses as occupational health and safety provision in the targeted exemption, so that the computer glasses remain untaxed.
Nevertheless, there is also a possibility for the DMS to purchase the computer glasses favorably. This is possible within the targeted exemption of the WKR. This means that the glasses do not have to be paid for privately and there is a gross/net benefit.
Avoid fines and penalties
The UBO register is an important tool against money laundering and terrorist financing. UBO stands for Ultimate Beneficial Owner, or beneficial owner.
Since its introduction on September 27, 2021, companies and other legal entities are required to disclose their UBOs. That option was available until March 27, 2022. The government will oversee enforcement at legal entities where the risks of money laundering and terrorist financing are highest.
As a firm, we are required to file a report if there is an incorrect or missing record with one of our clients.
Not registered yet? Avoid fines and penalties! The opportunity to register through the Chamber of Commerce has been extended until September 1, 2022.
The remuneration for your collaborating partner in your own company may be taken into account as a deduction when determining the profit of the company.
Remuneration of cooperating partner as a deductible expense
Do you have a partner who works in your company? Then you may grant your partner a business reward of € 5,000 or more. This reward can be used as deduction to be taken into account in determining the profit of the enterprise.
The collaborating partner is taxed on the remuneration. Up to a gross amount of € 23,344, the remuneration is untaxed, thanks to, among other things, the employment tax credit. Note, this is only the case if the remuneration from the collaboration is the only income of the partner.
Furthermore, the collaborating partner must take into account the healthcare insurance premium. With a salary of € 23,344 this amounts to a contribution of € 1,342.
Income-related combination discount for co-parenting
If as divorced parents you have divided the care of the children equally, you are both entitled to income-related combination discount (ICAK). It does not matter which parent the children are registered with in the municipal personal records database. As a condition for allocation of ICAK It is stated that children must stay with a parent for at least 3×24 hours. It is important that the 24 hours are completed. As of 1 January 2021, it is allowed that in addition to a fixed weekly rhythm, it is also sufficient if children stay with a parent for 157 days spread over the year. This also means that a day only counts if they stay with the same parent for 24 hours.
How does it work exactly?
As an entrepreneur, you can request a special deferral of payment for all tax assessments. applications. All requests that were submitted before 1 September on the basis of the consequences of the corona crisis fall under the relaxed regulation. Every entrepreneur who applies for a postponement due to the corona crisis will automatically be granted a three-month postponement of payment. This also applies to new assessments imposed during those three months, provided these are the same taxes and the tax liabilities are covered by this arrangement.
If you want to apply for a deferral for a longer period than three months, the intention is that as much money as possible remains in your company. For this, you must declare that you will not be paying out any dividends or bonuses, or purchasing your own shares.
This relaxed deferral policy applies at least until June 19, 2020. Any default penalties for not paying on time do not have to be paid and refunds are not required until September 1.
For which taxes does this possibility apply?
You can special deferral of payment applications for the following assessments:
- payroll taxes;
- sales tax;
- income tax/national insurance contributions;
- income-related contribution under the Healthcare Insurance Act (Zorgverzekeringswet);
- corporate tax;
- gambling tax;
- insurance tax;
- landlord levy;
- environmental taxes (energy tax and storage for sustainable energy and climate transition (ODE), coal tax, waste tax, tax on tap water);
- excise duties and consumption taxes on non-alcoholic beverages;
- and comparable taxes in the Caribbean Netherlands.
Notification of inability to pay not required
It is temporarily not necessary to also file a notification of incapacity to pay if you have requested a postponement of payment due to the corona crisis. It applies to periods that have already expired and to future periods, as from February 2020.
Need help applying for a deferment?
You can make a report yourselfbut do you have questions or need help, please contact us. We can advise and help you.
Did you receive your tax assessment around 1 July? If so, check whether averaging your income still results in a refund.
Received your tax assessment? Mediation is interesting
If your income varies, there is a chance that you have paid too much tax. Apportionment is interesting and can give you a tax refund if you have had widely varying income in box 1 in three consecutive calendar years.
If the tax refund recalculated through averaging amounts to more than the threshold of € 545, you will be paid. However, the tax assessments for these three years must have been finalised. The request for averaging must be submitted within 36 months after the assessments have become final.
We can make the calculation
We can make the calculation for you. Interested? Please contact us.
Received your tax return? You're letting us do the returns?
Also received an assessment? Let us take care of the tax returns and we will always check whether averaging makes sense!
Then watch out for a BPM or MRB charge with a fine!
Every resident of the Netherlands must pay tax on the purchase and possession of a car. But when are you considered a resident? And how do you avoid these taxes?
Resident of the Netherlands
You are a resident of the Netherlands and you need to register in the BRP (Personal Records Database). Are you in the Netherlands for more than 4 months within a period of 6 months? You will have to register here in any case. Are you here for a shorter period? In that case you can also be registered here if you work or study in the Netherlands.
As a resident of the Netherlands, you pay BPM when you buy a car, and you pay MRB if you have a car registered in your name.
Not a resident?
Are you not a resident? Then you do not pay BPM or MRB. But beware: the tax authorities can still see you as a resident of the Netherlands, while you think you are not. Your residence for tax purposes may be the Netherlands, even if you think you live abroad.
Exemption BPM and MRB
Are you a resident of the Netherlands driving a car with a foreign license plate? Then you have to pay MRB and possibly also BPM, but you can get an exemption for BPM and MRB.
There are several exemptions for a car with a foreign license plate:
Exemption for short-term use
Employee exemption
Employer exemption
Temporary stay in the Netherlands
Entrepreneurial scheme
Make sure you apply for this exemption in time, otherwise you could be charged a hefty penalty.
Apply for an exemption for foreign license plates?
Do you have a car with foreign license plates and do you need help applying for an exemption? Then please contact us.
This must be done within 1 year after the expiry of the payment term
Reclaiming VAT from non-paying debtors
Are you sure that your clients will no longer pay your invoices? Then you can reclaim the VAT you charged and paid on those invoices from the tax authorities.
Since 2017, the debt is in any case irrecoverable no later than one year after the expiry of the final payment date you agreed with your customer. Have you not agreed a payment term? Then a payment term of 30 days after receipt of the invoice by the customer applies.
You can reclaim the VAT you do not receive in the normal sales tax return.
Ask for a timely VAT refund!
Watch out! Apply for a VAT refund in time. This must be done at the latest in the return for the period in which the one-year period described above expires. Are you too late? Then you are no longer entitled to a refund. You must therefore ensure that you make a proper age analysis of the outstanding claims in each return.
Does your partner work in the company? Then decide how you want to reward his or her efforts.
Your partner works in your company?
There are three ways of rewarding the work of your partner who works in the business.
- Apply the deduction for collaboration. This is a deduction item, equal to a percentage of the profit. The percentage depends on the number of hours that your partner worked.
- Pay an employment allowance. The employment allowance is deductible from the company profit, but is taxed on the collaborating partner. Is the remuneration less than € 5,000, then the remuneration is not deductible from the profit and is not taxed on your partner.
- Let your partner join your company and form a general partnership. By joining the company your partner also becomes an entrepreneur. Your partner may then also be able to use entrepreneur facilities such as the self-employed tax deduction, the SME profit exemption and the old-age pension reserve.
Need any help?
Would you like more information or do you need help in determining which option is best for your situation? Then please contact us.
But pay this only after 1 January to avoid Box 3 tax
AB levy up in 2020
Next year, the AB levy will increase from 25% to 26.25 %. Each dividend you pay out this year will therefore save you 1.25%. However, this dividend will be included in your Box 3 capital as of 1 January 2020. And the saving will be gone immediately, because you will have to pay Box 3 tax.
Dividend still to be paid in 2019
You can avoid this by not paying out the dividend yet. This gives you a claim on your private limited company, which does not fall in box 3, but in box 1. This is a so-called TBS-receivable. You must declare the interest on the receivable as TBS income, but not the receivable itself. You may pay out this receivable to yourself at the beginning of 2020 in order to limit the interest. After that, this money will of course fall under your Box 3 capital. But this is an easy way to save your Box 3 tax but still make use of the low rate of 25% to Box 2 levy.
More information?
Please contact one of us if you would like more information on saving tax by paying dividends in 2019.
This way you can state the correct value in the tax return
Crypto wallets
Crypto currencies like Bitcoin, Monero and Ripple are subject to fluctuation. They are so volatile that you can drop or rise several dozen percent each day.
The banks in the Netherlands issue an annual financial statement, however this is not done with your Bitcoin, Ether, Litecoin and other crypto assets.
In your income tax return, you have to report your assets on January 1. To include the correct amount in your tax return as an individual, we advise you to make a screenshot of your crypto wallets on January 1.
Need help with your income tax return?
We help you with your income tax return. Please contact us for the possibilities and rates.
So pay attention if you work or have your business in another country.
Fixed installation
The tax plan 2020 contains a proposal to include a definition of the term permanent establishment in the income tax, wage tax and corporate tax. Up to now, nothing has been laid down in law about this, but it has been laid down in tax treaties.
In order to combat tax evasion, a definition of the permanent establishment (PE) is now proposed. This will enable a permanent establishment to be set up more quickly in many cases. This VI is important for the profit split of companies and self-employed persons.
The freelancer who works from the beach in Spain, will have a VI in Spain faster than before. There is no need for the so-called 183-day rule anymore.
For foreign companies with employees in the Netherlands, a VI in the Netherlands can also be established more quickly.
Using Habermehl's expertise
It is possible to submit the existence or non-existence of a VI in the Netherlands to the tax authorities in advance. Habermehl has a lot of experience in this and can advise you. Please feel free to contact us.
Income from criminal activities taxed but costs not deductible!
Crime does not pay tax
Taxation is amoral; that is, the tax authorities do not look at how the income is earned. Income from criminal or punishable activities is therefore simply taxed. But the costs you make to earn this income are not deductible.
Think of the raw materials for the production of drugs, the car expenses of the drug courier or the bookkeeping of the launderer. These costs are not deductible while the income is fully taxed. This can result in you paying more in taxes than you earn. Another reason not to engage in these criminal activities. Crime does not pay tax.
What else is not deductible?
Stab tokens
Fines imposed by a criminal court
Settlements to avoid criminal proceedings
Disciplinary fines
Weapons and ammunition without permit
Animals banned for aggression
Deprivation claim in the event of conviction
If you are convicted of criminal offences, a deprivation claim will often be submitted. This means that you may pay the proceeds back to the state. However, you will have to pay tax on these proceeds. A possible loss is only deductible to a very limited extent.
Crime doesn't pay...at least not fiscally.
Pension benefits
The taxation of (pension) benefits usually used to take place in the country of residence, i.e. the country where the taxpayer lives. In the latest treaties, however, the taxation of pensions is increasingly assigned to the source country, i.e. the country from which the pension originates.
The reason for this is that the source state also provides a facility on the pension. This means that the pension premiums are deductible and therefore provide a deduction item. It is then also logical to have the payments taxed where the premiums are deducted. This is therefore the case in the most recently concluded treaties.
You should therefore take into account that in the coming years more and more treaties will be concluded under which the taxation of pension payments is assigned to the source country.
Requesting pension benefits?
Please contact us if you have any questions about pensions and taxation. We will be happy to help you.
Then make sure you have a good rating
Give employees shares or allow them to buy shares?
Are you planning to give an employee shares in your company or have him/her buy them? Make sure these shares are properly valued. If you do not, any gain on these shares may be subject to payroll tax.
When taxed with payroll tax?
The Supreme Court is currently considering a case in which the AG recently issued an opinion. In this case, shares were transferred at nominal value to an employee. These shares were sold 2 years later for 500 million euro. The tax authorities have successfully argued that this profit is taxable with wage tax.
Any share distribution can therefore be subject to payroll tax, especially if the shares are transferred at too low a value. If you have made a proper valuation of the shares and sell the shares to your employee at their actual value, there will be less of a question of salary.
In this case, the required tax return had not been filed either. As a taxpayer you are already 1-0 behind, due to the reversal and increase of the burden of proof. So always file the correct tax return.
Need advice?
Are you thinking about giving or letting an employee buy shares and would you like advice? Then please contact us.
Not even if it has a negative balance
Deceased loved one?
Has a loved one of yours died and are you an heir? Then you have three options:
- you accept the inheritance
- you reject the legacy
- you accept the benefit
Never reject an inheritance
You can safely accept the inheritance if you are sure it is positive. If you know that the inheritance does not have a positive balance, then you can reject it. But by doing so you are putting this problem on the shoulders of others. If you have rejected the inheritance others will take your place. For example because you have rejected the inheritance your children will take your place and they will have the same problem. So never reject an inheritance. How to avoid problems? By accepting the inheritance beneficent. This way you can accept the inheritance but if the balance is negative you are not liable for the debts.
You can reject an inheritance or accept it favourably through the court.
VAT identification number
Do you have a one-man business or are you a self-employed person? If so, you have received a letter from the Tax and Customs Administration containing your new VAT identification number (VAT ID). This number replaces your VAT number.
The old VAT number could in fact be traced back to the Citizen Service Number (BSN). This is personal data which is sensitive to privacy. New VAT identification numbers have been issued in order to change this.
You use the VAT ID for communication with others. You therefore state this VAT identification number on your stationery, website, etc. and also on your invoice. And therefore also on your invoice!
VAT number
The old VAT number is now called the turnover tax number. The VAT number is used for VAT declarations and ICP declarations and all other correspondence with the tax authorities.
You use the VAT ID for communication with others. You state this number on your stationery, website, etc. and therefore also on your invoice. And therefore also on your invoice!
Any questions?
If you have any questions about the VAT return or if you are considering outsourcing your administration, don't hesitate to contact us.
Sell the car for too low a price to yourself
Has your 0% addition for your Outlander PHEV or Tesla Model S come to an end after 5 years? Then it can be very lucrative to sell the car to yourself for a much lower amount and thus save a lot of VAT. In this way, you can bring the car to your private life for a low amount.
Sell the car for too low a price to yourself
If your private limited company has bought a car for you, this car will be worth a lot less after one or two years. This is also reflected in the residual BPM, which after one year is only 68% and after two years 53 %. The car can be transferred to private ownership at the actual value.
However, for VAT purposes, sales tax is calculated on the fee. If you buy the car from your private limited company for the residual BPM and a small mark-up of €3,000, you will only pay €520 in VAT. This is because the reimbursement is so low.
The actual value is higher and you then make a hidden profit distribution. However, a dividend tax return must be filed for this.
Example
Book value car € 65,000 (excluding VAT)
Actual value/
purchase price car dealer € 60,400 (including vat)
Residual value BPM € 12.000
Actual value excl. VAT € 52,000
Sale to director for € 15,000 (including VAT)
VAT due
21%/121%x€ 3,000 = € 520
Instead of € 8.400. That makes a difference of € 7.880!
No correction possibility
The VAT tip mentioned above is possible because there is no statutory correction possibility for levying VAT according to the market value (WEV) in the event that the transaction price deviates from this WEV. The law is based on the objective concept of "compensation", Article 8.1 of the Turnover Tax Act 1968.
If there is no such remuneration or if the remuneration is purely symbolic, the WEV may be levied, see Article 8.3 of this Law.
The transfer of a car to private ownership from a BV to its DGA is, in principle, a normal commercial transaction, which is not artificial as such. From HR 29 June 2012, ECLI:NL:HR:2012:BR4525 it appears that a low, non-symbolic price is no reason to assume abuse of rights if there is otherwise a real economic transaction.
The Arnhem Court of Appeal of 26 June 2012, ECLI:NL:GHARN:2012:BX0556 even qualifies the inspector's adherence to the market value as the basis for levying VAT instead of the agreed (lower) fee as "litigating against one's better judgement".
It sometimes happens that a tax inspector objects to the present procedure. This has to do with a lack of knowledge. It is our experience that this way of working is accepted in the majority of cases nowadays.
No formal dividend payout!
In another case in which a BV sold a car to its DGA for the residual BPM, the tax inspector levied the sales tax on the basis of the actual value of the car. For the difference between the transaction price and the actual value, the BV had granted a net dividend, formalized in the general meeting of shareholders. This is part of the remuneration for the car on which VAT was rightly levied (Court of The Hague 22 August 2013, ECLI:NL:RBDHA:2013:11083). What went wrong here was that there was no question of a disguised dividend, as indicated above, but of a formalized dividend.
Directors' liability
To avoid potential directors' liability, withdrawing the car from the company as a (disguised) dividend must be financially sound. In any event, this should not be considered if the BV is in bad weather.
Do you want to save VAT?
Sell the car at an underpriced price to yourself and save VAT. Habermehl explains the best way to do this. Contact us by e-mail or call 035-6285753.
But you don't know if there are any debts? Watch out!
If so, accepting the inheritance on a benevolent basis may be the best choice.
But what is that and how do you do it?
As an heir, there are three different ways to deal with an inheritance.
Pure acceptance
Reject
Beneficial acceptance
Which one should you choose?
Pure acceptance
When you accept the inheritance purely, you accept it completely and you inherit all possessions and debts together with the other heirs. You are then also liable for possible debts (together with the other heirs who have accepted purely).
You can accept an inheritance purely if you are sure that there are no debts or if you know that the assets are worth more than the debts.
Reject
If you reject an inheritance, you have no right to the assets. You get nothing from the estate, including personal property but you are also not liable for any debts.
You reject an inheritance if you do not wish to receive any of the property or if you do not wish to be liable for any debts.
Beneficial acceptance
If you accept an inheritance in a benevolent way then you are entitled to the possessions but you do not have to contribute to the debts. Only when the legacy has more possessions than debts, you have to accept this. If it turns out that there are more debts than possessions, then you still reject the inheritance.
You accept the benefit if you suspect or are not sure that the debts are higher than the assets.
How to accept for profit?
If you do want to accept the assets benevolently, you must inform the court of your choice. This has to be done in writing at the court of the area where the deceased lived.
For more information, see this link.
Need any help?
Do you want help accepting an inheritance or do you want help with your inheritance tax return? Then please contact us.
Apply for the 30% scheme
Foreign employee
Due to the shortage on the Dutch labour market, more and more employers are recruiting employees from abroad. This is encouraged by the 30% scheme, under which 30 percent of the salary may be paid tax-free.
30% control
The 30% scheme may be applied for 5 years if the following conditions are met.
The employee is recruited from abroad.
He or she is employed by you or sent to work for you.
The foreign employee has lived more than 16 months of the two years prior to his/her first work in the Netherlands at a distance of more than 150 kilometres from the Dutch border (exceptions possible).
The employee has specific expertise, which translates into a salary of at least € 37,743.
A 30% scheme has been applied for and a decision has been issued by the tax authorities.
Any questions?
If you have any questions about the 30% scheme or other international matters, please contact us. We will take the work and worries off your hands.
If you are importing goods from the United Kingdom
With the upcoming Brexit on 31 October 2019, the UK is leaving the EU. This has important implications for VAT. When importing goods from the UK, you must remit the VAT at the same time as the import duties. However, there is a possibility to shift the charge of import VAT to the declaration. If you apply for a Article 23 permit in time, you may include the VAT in your own VAT return.
Article 23 Authorisation
Until 31 October 2019, the sale of goods from a Dutch entrepreneur to an entrepreneur in the United Kingdom is an intra-Community supply. This means that the supply is taxed at the zero rate. The condition is that the buyer in the United Kingdom makes an intra-Community acquisition. As a result, you do not have to pay any VAT.
Because the United Kingdom will no longer be part of the European Union from 31 October 2019, a purchase of goods will no longer be an intra-Community acquisition, but an import of goods.
By applying for an article 23 permit you can transfer the payment of VAT to your own VAT return. Because you are allowed to deduct this VAT directly as input tax, you do not need to pay it in advance, which gives you a significant cash advantage.
What conditions do you have to meet?
As an entrepreneur, you live in the Netherlands or are established there.
You regularly import goods from non-EU countries such as the United Kingdom or the United States.
A separate administration is kept which easily shows how much VAT you have to pay when importing the goods.
Apply for an Article 23 permit?
Would you like help applying for an article 23 permit? We are happy to help.
Deadline 1 October 2019
If you paid VAT in another EU country in 2018, you cannot deduct this VAT in your standard VAT return. Fortunately, you can reclaim this VAT from the Dutch Tax Administration if you meet the conditions.
Reclaiming VAT abroad
If you paid VAT in another EU country in 2018, you cannot deduct this VAT in your standard VAT return. Fortunately, you can reclaim this VAT from the Dutch Tax Administration if you meet the conditions.
Firstly, your company must be established in the Netherlands. Secondly, you have not declared VAT in the EU country where you are reclaiming the VAT. And you use the goods and services for business activities that are subject to VAT.
If you meet these three conditions, you may get a refund of the VAT you paid in another EU country. For the VAT paid in 2018, you must submit a request for a refund to the Dutch tax authorities before 1 October 2019. If you do not reclaim this VAT on time, there is a chance that the other EU country will not consider your refund request.
Requests for a refund of foreign VAT for 2018 will only be accepted by the Dutch Tax Administration if the VAT amount is at least € 50. If the amount is lower, you must reclaim the VAT in the country where it was paid
Increase the retirement commitment with this interest
Have you converted your pension provision into a PSO?
As of 2017, it is no longer possible to build up a self-administered pension. Have you converted the pension provision into an old-age obligation? Then you must increase this ODV annually by a certain percentage.
The interest rate is set out in Article 12.3a of the 2011 Payroll Tax Implementing Regulation (URLB). The market interest rate is the arithmetic average of the U-yields over the months of the previous calendar year, as published monthly by the Centre for Insurance Statistics of the Dutch Association of Insurers. See also: U-yield.
For 2019, the market interest rate is set at 0.269%.
Then watch out for a BPM or MRB charge with a fine!
Every resident of the Netherlands must pay tax on the purchase and possession of a car. But when are you considered a resident? And how do you avoid these taxes?
Resident of the Netherlands
You are a resident of the Netherlands and you need to register in the BRP (Personal Records Database). Are you in the Netherlands for more than 4 months within a period of 6 months? You will have to register here in any case. Are you here for a shorter period? In that case you can also be registered here if you work or study in the Netherlands.
As a resident of the Netherlands, you pay BPM when you buy a car, and you pay MRB if you have a car registered in your name.
Not a resident?
Are you not a resident? Then you do not pay BPM or MRB. But beware: the tax authorities can still see you as a resident of the Netherlands, while you think you are not. Your residence for tax purposes may be the Netherlands, even if you think you live abroad.
Exemption BPM and MRB
Are you a resident of the Netherlands driving a car with a foreign license plate? Then you have to pay MRB and possibly also BPM, but you can get an exemption for BPM and MRB.
There are several exemptions for a car with a foreign license plate:
Exemption for short-term use
Employee exemption
Employer exemption
Temporary stay in the Netherlands
Entrepreneurial scheme
Make sure you apply for this exemption in time, otherwise you could be charged a hefty penalty.
Apply for an exemption for foreign license plates?
Do you have a car with foreign license plates and do you need help applying for an exemption? Then please contact us.
How to avoid fines
As an entrepreneur, you obviously have your administrative and fiscal affairs taken care of by an expert and well-trained advisor. If there are still errors in the administration, no penalty can be imposed on you as an entrepreneur.
Fines Tax Administration. Who's guilty?
For the imposition of a fine there must be intent or gross negligence. If you have your declarations done by a tax consultant, then you cannot be blamed for this.
It is important that you choose a good advisor and work well with them. If you do not exercise the "necessary care in the choice of advisor" a fine can be imposed. Also if you do not provide him or her with the right information during the cooperation, this can lead to a fine.
Choice of tax advisor
So choose your tax advisor with care and work well with him or her!
Check for averaging!
Did you receive your tax assessment around 1 July? If so, check whether averaging your income still results in a refund.
Mediation is interesting
If your income varies, there is a chance that you have paid too much tax. Apportionment is interesting and can give you a tax refund if you have had widely varying income in box 1 in three consecutive calendar years.
If the tax refund recalculated through averaging amounts to more than the threshold of € 545, you will be paid. However, the tax assessments for these three years must have been finalised. The request for averaging must be submitted within 36 months after the assessments have become final.
We can make the calculation
We can make the calculation for you. Interested? Please contact us.
You're letting us do the returns?
If so, we will always check whether averaging makes sense!
In your income tax return, you must declare all of your assets and debts if they are worth more than € 30,360. Do not forget to state your share in the reserve of your Association of Owners (VvE).
Share of reserve fund Claiming the VvE in Box 3
As the owner of an apartment or a shared plot, you are often an (obligatory) member of an Owners' Association (VvE). This association often has a reserve. As a member, you are obliged to contribute to such a reserve fund, such as a general reserve or a maintenance reserve. This contribution is collected by means of a monthly or annual contribution to the VvE. This reserve is used to pay for communal renovations or maintenance.
Because of this contribution, your share in the reserve fund is often considerable. You no longer have access to this money and when you sell the property, you sell your share of the reserve with it.
You must declare the value of your share in this as property in Box 3. Even though this may seem unjust because you no longer have access to the money yourself.
The Supreme Court ruled back in 2010, against the advice of the Advocate General, that you must declare this as property in Box 3. So ask your Owners' Association for a statement of your share in the reserve fund.
This is a public official
Many people still have a notary handle the settlement of an estate, including the inheritance tax return.
Why not by a notary?
A notary public is a public official according to the law. He serves the public interest. If he prepares an inheritance tax return, he will always remember the oath he took, which states that he will behave in accordance with the laws and perform his task impartially.
He will also keep the public interest in mind when checking inheritance tax assessments. This need not lead to the most advantageous solution for you.
What could go wrong?
For example, we received an inheritance tax return that contained an obvious error, to the advantage of the taxpayers. We checked the declaration and it was submitted correctly. The error lay with the tax authorities. We told our clients about this error but did not tell the Tax Authorities. We do not have to actively inform the Tax Authorities about this.
A civil-law notary should have reported this error to the Tax Authorities. This would have cost the client extra inheritance tax. There is of course a chance that the Tax Authorities will find out and impose an additional assessment. But how big is that chance?
Do you wish to file an inheritance tax return?
Do you need to file an inheritance tax return? Then we can help you further. Please feel free to contact us.
This is the replacement of the KOR in VAT
As of January 1, 2020, the small-business rule (KOR) in VAT will be replaced by the turnover-related exemption from VAT (OVOB).
What is the OVOB?
The turnover of the entrepreneur is the starting point. If your turnover is less than € 20,000, you can opt for the OVOB. That means:
You do not and may not charge VAT to your customers anymore;
you can no longer deduct the input tax;
You no longer need to submit a VAT return.
Which turnover counts?
This concerns the turnover for the supply of goods and services in the Netherlands and intra-Community supplies from the Netherlands.
Who does this apply to?
The OVOB applies to every entrepreneur, including the BV. The KOR only applied to the one-man business and the general partnership.
You can apply for this from 1 June 2019. If you do this before 20 November, you will be able to take advantage of this scheme from 1 January 2020.
Interesting for you?
Want to know if this is interesting for you? Let us find out.
So object to your own declaration
Statutory auditor not a VAT entrepreneur after all
In recent years, a supervisory director was a VAT entrepreneur. In a recent judgment, the Court of Justice of the EU ruled that a member of the Supervisory Board is not a VAT entrepreneur.
It concerns a recent case in which a municipal official is also a member of the supervisory board of a foundation. According to the civil servant, he does not perform the activity independently. The Court of Appeal of 's-Hertogenbosch referred the case to the Court of Justice of the EU for a preliminary ruling.
According to the Court of Justice of the EU, the official acts on behalf of and under the responsibility of the Supervisory Board. Furthermore, the Court of Justice of the EU considers it important that X does not bear an economic business risk, as he receives a fixed remuneration which does not depend on his participation in meetings or on his actual hours worked.
Object
Have you filed a VAT return for activities as a non-executive director and not taken advantage of the KOR scheme? Then you can object to your own tax return and reclaim the VAT. Do you need help? Please contact us.
Age reduced to 21
Minimum wage increased
From 1 July 2019, workers aged 21 and over will be entitled to the full minimum wage. The minimum wage for workers aged 18 to 21 will be increased.
Age By month By week By day
21 years and older € 1,635.60 € 377.45 € 75.49
20 years € 1,308.50 € 301.95 € 60.39
19 years € 981.35 € 226.45 € 45.29
18 years € 817.80 € 188.75
17 years € 646.05 € 149.10 € 29.82
16 years € 564.30 € 130.20 € 26.04
15 years € 490.70 € 113.25 € 22.65
Full-time working week in company 21 years and over 20 years 19 years 18 years 17 years 16 years 15 years
36 hours € 10.49 € 8.39 € 6.30 € 5.25 € 4.15 € 3.62 € 3.15
38 hours € 9.94 € 7.95 € 5.96 € 4.97 € 3.93 € 3.43 € 2.99
40 hours € 9.44 € 7.55 € 5.67 € 4.72 € 3.73 € 3.26 € 2.84
Questions or more information?
Do you have a question or want to know more? Then please contact us.
Pay attention to timely commencement of benefits!
Are you the owner of a stamrecht-BV? Then you have to buy a periodic payment from the standing right capital. You have to do this at the latest at the age of 65 or AOW-age.
Payroll tax claim
In the past, you paid a severance payment tax-free into an 'Stamrecht-BV'. No wage tax was withheld on this capital. The future payments are therefore still subject to wage tax.
Final date of periodic payment
Therefore, you have concluded a standing right agreement with the BV. This agreement states when the BV must pay you the periodic payment.
According to the law, these benefits must start at the latest on the AOW pension age or the date you turn 65.
Aftertax
If you do not purchase a periodic payment by the deadline, the Tax Administration can impose an additional assessment for the wage tax that should have been paid. In that case the Tax Authorities themselves can impose an additional assessment for the wage tax that should have been paid.
The tax authorities can also impose an additional assessment for corporate income tax on any release profit enjoyed because the standing right provision is used to purchase a periodic payment.
How do you participate?
The Secretary of State has classified some of the objections to the Box 3 levy for 2018 as mass objections.
What does mass appeal mean?
The mass objection procedure means that the Tax and Customs Administration, together with various other parties, selects a number of objections and puts them to the tax courts. Once the ruling of the court is irrevocable, they issue a collective ruling on all objections that have been included in the mass objection procedure. If your objection is included in the procedure, you do not have to go to court yourself. This will make a considerable difference to your costs.
How do you participate in the mass objection procedure?
You must file a timely objection to the 2018 income tax assessment. You must do this within 6 weeks of the date on the assessment. Are you too late? Then you do not participate.
You object because the Box 3 levy is an "infringement of the right to property", is in violation of Article 1 of the ECHR or the prohibition on discrimination in Article 14 of the ECHR.
Any other reason?
Do you have another reason for objecting? Then you will not take part in the mass objection procedure.
Assistance with objection?
Would you like help with your objection? Please contact our tax specialists. They will be able to advise you on the chances of success and on the proper drafting of a notice of objection.
Make sure your correct address is known to the tax authorities
If you are going abroad for a longer period of time, make sure that the tax authorities can reach you or that your mail is forwarded properly, otherwise you could be faced with high assessments and fines upon your return. Or your passport may not be renewed.
Once entered, the address stays entered
This happened in a recent case. A taxpayer moved abroad in 2011. He sent a letter to the Tax Authorities to terminate the benefits because he was going to emigrate. In the letter he gave his parents' address to which the confirmation of the termination of the benefits was to be sent.
After this the Tax Authorities sent more letters to this address, including a questionnaire. Because the inspector had no other address than the address of the parents of the tax payer, they noted this address as the forwarding address.
Despite reminders, the taxpayer never responded to the questionnaire, probably because these letters never reached him. The Tax Authorities therefore imposed assessments with penalties and also sent these to the known address.
Passport renewal refused
In 2018, taxpayer wanted to renew his passport. This was refused because he still had tax debts. The taxpayer argued that he had never received the assessments.
Objection
The court did not agree. Because he had given his parents' address and had not changed it, the assessments had been announced correctly and in time.
The objection was therefore declared inadmissible and the assessments and fines had to be paid.
How to avoid this?
Make sure you give the correct postal address so that the tax authorities can reach you. Even after you have emigrated, assessments and letters may still follow. If you provide an address of friends or family, ask them to forward the mail to you by email as soon as they receive it.
Emigrating? Habermehl as your postal address!
For many clients we take care of forwarding the mail from the Tax Office. We act as a postal address for the Tax Office and ensure that all mail is scanned and forwarded by mail. This way no deadlines are missed and objections can be lodged on time.
But you don't know if there are any debts? Beware!
If so, accepting the benefit may be the best choice. But what is it and how do you do it?
Heritage
Receiving an inheritance? As an heir, there are three different ways to deal with an inheritance.
- Pure acceptance
- Reject
- Beneficial acceptance
- Which one should you choose?
Pure acceptance
When you accept the inheritance purely, you accept it completely and you inherit all possessions and debts together with the other heirs. You are then also liable for possible debts (together with the other heirs who have accepted purely).
You can accept an inheritance purely if you are sure that there are no debts or if you know that the assets are worth more than the debts.
Reject
If you reject an inheritance, you have no right to the assets. You get nothing from the estate, including personal property but you are also not liable for any debts.
You reject an inheritance if you do not wish to receive any of the property or if you do not wish to be liable for any debts.
Beneficial acceptance
If you accept an inheritance in a benevolent way then you are entitled to the possessions but you do not have to contribute to the debts. Only when the legacy has more possessions than debts, you have to accept this. If it turns out that there are more debts than possessions, then you still reject the inheritance.
You accept the benefit if you suspect or are not sure that the debts are higher than the assets.
How to accept for profit?
If you do want to accept the assets benevolently, you must inform the court of your choice. This has to be done in writing at the court of the area where the deceased lived.
Need any help?
Do you want help accepting an inheritance or do you want help with your inheritance tax return? Then please contact us.
Pay attention to the deadline or request a postponement
The annual accounts
The annual accounts of your BV must be drawn up and submitted to the shareholders within five months of the end of the financial year. According to the Dutch Civil Code, you are obliged to do this. Make sure you do this on time or request a postponement. After the annual accounts have been adopted, they must be filed with the Chamber of Commerce.
Who has to deposit?
The obligation to file applies to BVs, NVs, cooperatives and mutual societies. In addition, VOFs and CVs must also file if all managing partners are foreign capital partners, as well as associations and foundations with a company that achieves an annual turnover of at least € 6 million in two consecutive financial years.
When do you have to file?
A BV must prepare its annual accounts within 5 months after the end of the financial year. The latest date for this is 31 May 2019 for a calendar year. The board of directors then submits the annual accounts to the shareholders.
The shareholders may grant the management board an extension for the preparation of the annual accounts. This postponement may last up to 5 months. The annual accounts must then be drawn up by 31 October at the latest. We recommend that this granted postponement be recorded in writing.
The shareholders then have two months to adopt the annual accounts. At the latest on
The annual accounts must be filed with the Chamber of Commerce by 31 December.
Exception: DGA
Is the board also the sole shareholder? Or are all shareholders also directors or supervisory directors? In that case the two-month period for preparing the annual accounts expires. In that case, you must also file within 8 days of preparation. The deadline is then November 8.
What if you don't file in time?
Late or no filing is an economic offence. The tax authorities and the Public Prosecution Service may impose a fine on you as a result. You may also be summoned to appear in court.
As a director you can also be held personally liable for debts of the BV.
So make sure that you prepare and file your annual accounts on time.
Need any help?
We can take the preparation of the annual accounts, tax returns and administration off your hands. Interested? Then please contact us.
This way they are deductible 100%
Deductible expenses
Not all expenses are fully deductible. These are food, beverages and stimulants, representation costs such as receptions and entertainment. Also conferences, seminars and study trips are not 100% deductible.
These costs are considered to have a private element. Therefore, you can only deduct these costs for 80 % (sole trader, VOF) or deduct 73,5 % (BV). You can also opt for the threshold of € 4,600.
Designate limited deductible expenses in the WKR
If you have a BV, you can also designate these costs as final taxable income under the WKR. This means that these costs are deductible for 100%. This allows you to offer your employees a tax-free allowance of 1.2 % of the wage bill. This is called the free margin. A company outing that is normally only deductible for 80% can now be fully deductible. And it costs the employees nothing.
Any questions?
Do you have questions about the deductibility of expenses? We know how it works. Just get in touch with us.
If he receives monthly wages
It is common for a DMS to declare his salary to the tax authorities once a year. However, the tax authorities do not (or no longer) approve this.
Nihila declaration DGA
If the DMS is the only employee of a BV, in many cases a zero declaration will be filed 11 times and in the last declaration the wages are reported to the Tax Authorities and the income tax is paid on this. According to the Tax Authorities, these so-called zero declarations are only possible if you do not receive a monthly wage.
You can file a zero tax return 11 times if the DMS receives his/her total wage in December or if you receive a so-called fictive or customary wage. Do you not comply with these exceptions? In that case you simply need to file the normal wage tax return 12 times.
Payroll administration via Habermehl
Would you like Habermehl to take care of your payroll? That is possible! Please contact us.
After you have purchased it on the BV
Has your private limited company bought a car for you, but are you fed up with the additional tax liability after one or two years? Then it can be very lucrative to sell the car to yourself for far too low an amount and save a lot of VAT.
Sell the car for too low a price to yourself
If your private limited company has bought a car for you, this car will be worth a lot less after one or two years. This is also reflected in the residual BPM, which after one year is only 68% and after two years 53%. The transfer to private can be done at the actual value.
However, for VAT purposes, sales tax is calculated on the fee. If you buy the car from your private limited company for the residual BPM and a small mark-up of €3,000, you will only pay €520 in VAT. This is because the reimbursement is so low.
The actual value is higher and you then make a hidden profit distribution. However, a dividend tax return must be filed for this.
Calculation example
Book value car € 65,000 (excluding VAT)
Actual value/
purchase price car dealer € 60,400 (including vat)
Residual value BPM € 12.000
Actual value excl. VAT € 52,000
Sale to DGA for € 15,000 (including VAT)
VAT due
21%/121%x€ 3,000 = € 520
Instead of € 8.400. That makes a difference of € 7.880!
Do you want to save VAT?
Habermehl explains the best way to do this. Contact us by e-mail or call 035-6285753.
And avoid that not everything is deductible
Are you getting divorced? Is one of you going to keep living in your own home? Then it is customary that this one also pays all mortgage interest and repayments until the house is sold.
Divorce and the home
In the first two years after the divorce, this is not really a problem because, based on the divorce settlement, the interest is still deductible for the partner who no longer lives there. After this period, the interest is no longer deductible. There are solutions to prevent this, such as changing the occupancy of the property by the former partners.
For the partner who continues to live there, the interest he or she pays is deductible as alimony. Make sure that this is properly recorded and that there is no question, for example, of a user fee. Otherwise the tax authorities will not accept this as a deductible maintenance obligation. The correct formulation of the agreements is of great importance here.
Covenant tax check
In practice, we often find that the tax paragraph in the covenant receives too little attention. Prevent future discussions and let us carry out a tax check on the covenant.
Otherwise it will be more heavily taxed
Dividend payment is still possible this year and next year, so do you have profit reserves in your BV? Then distribute them as dividend before 2020.
Distribution of dividend
Paying out dividends may be advisable, because as of 2020, the tax for substantial interest shares will increase from 25% to 27.3% and as of 2021 even to 28.5%. This means that you will pay more tax on the same profit. Therefore, file your dividend tax return on time.
Can you make a provision for the costs now?
Do you have a business office building that you use or rent out yourself? Then as of 1 January 2013, you will have to have at least an energy label C if it is larger than 100 m². Do you not have energy label C on that date? Then it may no longer be used as an office building. Can you make a provision for the costs and already charge them to your profits?
Provision
You may make a provision in 2019 for the costs you will incur in 2023 as the expenses for this:
originate from circumstances that occurred before the balance sheet date;
can be attributed to this period;
with a reasonable degree of certainty will occur.
The purpose of the expenditure is to make the office space suitable for letting as office accommodation. But the costs are not attributable to the current rental income and therefore cannot be allocated to this period. So unfortunately you may not make a provision in 2019 for these costs that will be incurred in the future.
What can you do?
You can value the property at cost or lower value in use. Future capital expenditures may reduce the value in use. Commercial property is valued at the present value of future cash flows. You may therefore be able to deduct part of the future investment from your profits now.
Would you like more extensive advice?
Would you like more detailed advice about the provisions you can make? Then please contact us.
Are you and your partner(s) shareholder in a BV? Then you probably don't think about the mandatory employee insurance, do you? After all, you are not an employee!
If you are a shareholder of a BV with 1 or more partners, you often do this through a Personal Holding BV (PH). You are employed by your PH and you enter into a management agreement with the operating company (WM). The court recently ruled that the conditions in this management agreement were such that there was an employment contract. This meant that there was a relationship of authority and therefore an obligation to take out employee insurance.
DGA employee insurance mandatory
Every employee is insured under the employee insurance schemes, such as the Unemployment Insurance Act, the Disability Insurance Act, the WIA and the Sickness Benefits Act. In principle, this does not apply to a DMS.
The employment relationship of the director/major shareholder is not considered an employment relationship for the purposes of employee insurance. This is because there is no relationship of authority between the DMS and his employer. Who should be considered a DMS is determined in the Regulation Designation Director-Rajor Shareholder. This concerns:
1. the director who, whether or not together with his spouse, holds at least 50% of the votes in the general meeting of the company;
2. a director who, whether or not together with his spouse, holds such a number of shares that he can prevent dismissal;
3. the directors who can all cast an equal or almost equal number of votes in the general meeting of the company;
4. the director of a company of which at least two-thirds of the shares are held by his relatives by blood or marriage up to the third degree.
Conditions management agreement
The District Court of Gelderland recently ruled in ECLI:NL:RBGEL:2019:1115 that there was indeed an employer-employee relationship because the management agreement included the following conditions.
- A monthly payment has been agreed of € 11,666 exclusive of VAT, whereby it has been determined that this will be based on 40 hours of work per week.
- If the work cannot be performed due to illness, the fee shall continue to be paid for 12 months.
- The agreement will expire immediately once the PH is no longer a shareholder or upon the death of the DGA.
- There is a two-year non-competition clause for relations of the operating company.
- The WM takes out professional liability insurance.
Do you not want to be obliged to take out employee insurance?
Then pay close attention to the conditions you agree on together! In this case it went wrong for the shareholders. Do you want to be sure you are agreeing on the right conditions? Have your management agreement drawn up or reviewed by us. Please contact us and make an appointment.
Not even if this 100% is business!
Were you and your company at the Amsterdam Light Festival last winter? Do you sometimes hire a boat to go sailing with your clients in the summer? Then you probably think that you can deduct these costs, which are entirely business expenses, from your profits.
Representation expenses
Unfortunately, the legislator has put a stop to the deduction of entertainment expenses. All costs of vessels that are used for representative purposes are not tax deductible. This applies to the possession and rental costs of the boat. The individual costs of snacks and drinks are deductible, as well as any advertising.
This deduction limit is always more favourable than paying the relevant costs privately after dividend or salary. So do not pay it from your private account.
If you send invoices abroad
Do you have customers outside the Netherlands but within the EU? Then you probably send invoices whereby the VAT is reverse-charged to the foreign buyer. Check the VIES system when you send each invoice so that you are not liable for the VAT.
Check the VIES system
If you supply a service to a private individual in another EU country, you will send them an invoice with Dutch VAT because the place of supply is the Netherlands.
If you provide a service to an entrepreneur in another EU country, the VAT of the country of the customer applies. To make things easier for you as a Dutch entrepreneur, you do not have to pay this VAT yourself in the other EU country, but your customer does that for you. The VAT is then transferred to the customer.
You must state your customer's VAT number on your invoice. You must also check the validity of this number. You do this by means of the VIES system.
If you have checked this number, you will no longer be liable for any VAT which your customer fails to pay to the tax authorities. It is important that you can prove that you have checked the number. We therefore advise you to make a print screen of the outcome and to keep it with your invoice.
It is not enough to check this once and assume the number is still valid for the following invoices. You must check this again for each invoice. Otherwise you will still be liable.
Do you need help with your administration or a tax question?
Get in touch with us. Our staff will be happy to assist you.
Then ask to be heard so that you can inspect the tax authorities' file.
Submit an objection and request inspection
In this notice of objection, you can write why you do not agree with the tax assessment. It is important to ask to be heard in this objection procedure. In a hearing, you will be able to explain exactly why you believe the tax assessment is incorrect.
But perhaps even more important: you can ask to see all the documents relating to the case. The Tax Authorities have to show you all the documents in the file. You may even make copies of all documents.
Substantial fine by Habermehl annulled
For example, we once had a substantial fine of 50% annulled by inspecting the file. The fine file stated that there was no intent or gross negligence. In order for a fine of 50% to be imposed, there must have been intent or gross negligence, and if this is not the case, the fine cannot be upheld. The Tax Authorities themselves had indicated in an internal memo that no fine should have been imposed. But it was. By inspecting the file, this error was exposed and the fine was annulled.
So always ask to be heard during the objection phase, in order to gain access to the file.
Need help with an objection procedure?
Contact us if you wish to initiate an objection procedure. Our experts will take the worry out of your hands.
Please note that your advisor must report this to the tax authorities.
Duty to report tax evasion
On 13 March 2018, the so-called Mandatory Disclosure Directive was unanimously adopted. This directive means that tax advisors, notaries and lawyers must report to the Tax Authorities if they are or have been involved in cross-border tax structures where there is a possible risk of tax avoidance.
Tax intermediaries must report their involvement in a tax-aggressive structure to the Tax Authorities within 30 days. It is not important whether the tax advice is actually implemented or not. Nor is it important whether the advice is broadly within the legal framework or, on the contrary, is particularly aggressive in nature and pushes the limits of the law. National advice does not have to be reported. It is cross-border advice that counts, provided it meets certain characteristics.
The privilege for lawyers and advisers expressly does not apply. So are you asking your tax consultant for advice on a cross-border tax structure? If so, please bear in mind that the Tax Authorities may be notified of this.
Need tax advice?
Do you want to make the most of all tax laws and regulations? Whether you are a company or an individual? Our tax specialists know the rules through and through and will immerse themselves in your situation. That saves you time and gives you tax advantages. Now and in the future. Contact us and make an appointment.
And avoid a VAT fine
What many entrepreneurs do not know is that if you have performed a service or a delivery, you MUST send an invoice within two weeks after the end of the month. If you do not do this, the tax authorities can impose an additional assessment of sales tax with a penalty.
Avoid a VAT penalty
If you have a holding structure (a holding company and an operating company), you often send an invoice for your management fee from the holding company to the operating company. It can happen that the operating company is making a loss and that you therefore decide not to send an invoice for your services because you will not get paid anyway.
However, the Tax Authorities can impose an additional assessment pursuant to Article 34g of the Turnover Tax Act because you should have sent a VAT invoice within 15 days of the end of the month. Because you have not done this, you also get a VAT penalty.
Make sure that you send an invoice on time. In any case, within 15 days after the end of the month.
What do you do if the customer doesn't pay?
If the customer (in this case the operating company) does not pay the invoice, you can always reclaim this VAT on the basis of Article 29 of the Turnover Tax Act.
Need any help?
Do you need advice on the BV or receive penalties? or any other tax questions, please feel free to contact us.
Or the appeal is dismissed as inadmissible
Do you disagree with an assessment by the Tax Administration? If so, you can lodge an objection. In your notice of objection, you can explain to the Tax Administration why you disagree. Does the Tax Authorities stick to their position? If so, you can lodge an appeal with the court.
Court fee
In the notice of appeal you send to the court, you state the grounds for the decision you are appealing against and why. You will receive an invoice for the court fees immediately afterwards.
In this context, the term 'gatekeeping' is also used. In administrative law, which includes tax law, court fees have long been charged at the start of the procedure. In this way the collection risk of the government is limited.
How high are the court fees?
A natural person pays € 47 for court fees for all taxes except VAT, dividend tax and BPM.
A natural person pays € 174 for court fees for turnover tax, BPM and dividend tax.
A legal entity pays € 345 in court fees.
Pay on time
You have 4 weeks to pay the court fee. Article 12 of the Rules of Procedure for Administrative Law 2013 states that the court will first send an informal invitation by ordinary mail, setting a deadline of four weeks. If the amount is not paid within this period, a final demand for payment follows, pursuant to Article 8:41 of the Awb. You then have another four weeks to pay.
Do you not pay the court fee on time? Then the court can declare your appeal inadmissible. This means that they will not deal with the content of the appeal. So make sure you pay the court fees in time for an appeal to the tax court.
Need advice on an appeal procedure?
Then please contact us. We know the rules and are happy to assist you in the procedure.
Not only wage tax!
If you have a stamrecht BV, then in the past you have received a severance payment from your former employer. This payment was transferred to the BV in gross, i.e. without withholding of income tax.
Pay out annuity
If you are going to distribute this standing right, the distributions will be regarded as income and you will have to pay income tax on them. But there is another tax claim that you probably did not think of.
The periodic benefits paid to you by the Stamrecht BV must be actuarially calculated. This means that the BV must value the obligation on actuarial principles. Actuarial means that mortality rates will be taken into account. There is a chance that the person entitled to benefits dies during the period of the benefits. That in turn is a profit for the BV.
The BV must then calculate the value of the future benefits it pays to you. For tax purposes, a notional interest rate of 4% must be taken into account. This means that the BV is expected to make a return of 4%. In practice, this return is currently not being achieved. This means that the calculation must take into account a higher return than that actually achieved commercially. This means that the value of the obligation at the start of the payments is lower than before the payments started. This leads to a fiscal release and thus to a profit on which tax must be paid.
Invisible tax claim
So take this invisible tax claim into account. There are various ways in which you can limit the damage. You can opt to commute instead of paying out or you can shorten the duration of the payments. Would you like us to make the calculation or to advise you on this? Please contact us by telephone.
And avoid a fine
Do you find out that you have to pay an additional amount of VAT for 2018? Then file a supplementary VAT return quickly.
Quickly submit a supplementary VAT return
File the supplementary VAT return quickly, before filing your income tax or corporate tax return. This is because the Tax and Customs Administration uses your annual accounts or income tax or corporate tax return to check whether you still have a VAT liability on your balance sheet. This means they can find out for themselves whether you still have to pay an additional amount in VAT.
Fine
If the tax authorities find out about this without you having declared it yourself, you can be fined.
If the amount is higher than € 20,000.00, you will in any case receive a substantial fine. You should therefore ensure that you always check your VAT return carefully to ensure that the amount of additional VAT payable does not exceed € 20,000.00.
Outsource your financial administration?
Do you prefer to outsource your entire administration? Habermehl delivers tailor-made solutions. Contact us for more information and make use of our free transfer service.
In the case of an electric motor, the tax authorities will even help pay for it.
The motorcycle season is about to begin!
Motorcycle on the move
Are you an entrepreneur and are you considering putting a motorcycle on your business? All costs and VAT are deductible. You do not have an additional tax liability like with a car, but only a small correction for the kilometres driven for private purposes.
Electric motor on the go
Are you planning to buy a new motorcycle? Then consider an electric motor. With an electric motorcycle, you are entitled to the KIA and the MIA. These ensure that of the investment you make, the taxman will contribute approximately 80%.
Want to ride a motorcycle on the company?
Do you want to know how you can drive a motorcycle on the company budget? Then get in touch with us.
Such as travel and shipping costs that you pass on to your customer
One of the most common mistakes we encounter. You send your client an invoice for your supply or service. You calculate the applicable percentage, 21% or 9% or without VAT if it is an exempt service.
You also take into account travel expenses, for example, a train ticket or an airplane ticket. There is 9% VAT on train tickets and no VAT on airline tickets. What percentage do you charge your client for these costs?
Additional performance and main performance
The additional performance is incorporated in the main performance. This means that this additional service is subject to the VAT rate of the main service.
Examples
If you send a pallet of coffee to your client, then the low VAT rate of 9% also applies to the shipping costs. Because the 6% rate applies to coffee (the main service), this also applies to the shipping costs (additional service).
If you provide consultancy to your client on the other side of the country and take the train to do so, what costs do you pass on to your client? If so, the high VAT rate of 21% applies to the train costs (additional service) because the main service (consultancy) is also subject to 21% VAT.
Do you have a museum or nature park and do you also charge for parking? Then parking (normally high rate) also follows the low VAT rate of the museum admission.
Need any help?
Do you need help with your VAT return and your financial administration? Then get in touch with us. We are happy to help.
They are not completely anonymous and can therefore be traced by the tax authorities.
Do you have Bitcoin, Ripple, Ethereum or Litecoin? If so, you have to declare the value of these currencies in your Box 3 capital on 1 January. Many people think that these currencies are anonymous and therefore untraceable.
Crypto Currency
According to crypto-valuta.nl, a leading website on crypto-currencies, Bitcoins etc. are not completely anonymous at all. In addition, you should always declare all your receivables and cash and other assets in Box 3, even if they are not directly visible to others.
Do you have a wallet in which you have stored your crypto currency? If so, report the value as of January 1, 2018 in your 2018 income tax return.
However, due to the sometimes difficult marketability, you may be able to record a lower value than the price in effect on January 1, 2018.
Need help with your income tax return?
Please contact us. We will be happy to help you.
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More information
tax specialist
+31 (0)35 628 57 53
marieke@habermehl.tax
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