As we approach Prinsjesdag 2023, the annual Dutch Budget Day, the anticipation is mounting for the unveiling of tax plans for the upcoming year. In this article, we delve into the expected modifications in tax plans for 2024. Given the current transitional state of the cabinet, the tax changes may be less extensive than anticipated. The complete list of changes can be accessed here.
Box 2 is applicable to partners in a partnership or directors-major shareholders (DGA) with a substantial interest (more than 5% of shares) in a company. It also applies when dividends are distributed from profits to shareholders. From 2024 onwards, Box 2 of the income tax will feature two rates:
- A base rate of 24.5% for incomes up to €67,000
- A higher rate of 31% for incomes beyond that threshold Currently, Box 2 has a single rate of 26.9%.
Box 3: Defiscaling Mutual Debts and Claims
A change is introduced for mutual debts and claims between fiscal partners and between parents and children under 18. These debts and claims no longer need to be declared in their tax returns. This applies only if the minor child’s income is combined with that of the parents, leading to their tax return being treated as one.
Box 3: Including Homeowners Association (VvE) Shares Under Savings
Presently, Box 3 imposes distinct calculated returns for savings and other assets, such as stocks and real estate. If you own an apartment, you are required to be part of the Homeowners Association (VvE). The VvE accumulates reserves for shared expenses, like roof replacements. Your share of this reserve must be declared in Box 3. Starting from 2024, this share will officially receive the same hypothetical return allocation as savings.
Abolishment of Payment Discount for IB
Starting January 1, 2023, there is a change in the payment discount for provisional business tax returns (corporate tax). This also implies the discontinuation of the discount for individuals who have to pay tax on their income for provisional returns. This alteration aligns with what was discussed in the political realm regarding the Fiscal Collection Act 2023.
Adjustments in Business Succession Scheme (BOR) and Deferral Scheme (DSR)
Changes are in the pipeline for the BOR and DSR, which pertain to transferring family businesses. These schemes offer substantial benefits during inheritances and donations, featuring significant tax exemptions, conditional on business continuation. In 2025, adjustments are planned for the BOR. Nonetheless, a few aspects will be enforced from January 1, 2024. One such modification concerns the classification of leased real estate as an investment. (Interestingly, the same change applies to the deferral scheme concerning substantial interests.) Furthermore, starting 2024, the rule limiting investments to a maximum of 5% of business assets will no longer apply when utilizing BOR or DSR.
Increase in Fixed Purchase Tax (BPM) Base Rate
Purchasing a non-electric car will become pricier next year. The fixed base rate in BPM will be €200 higher in 2024 compared to 2023.
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