Changes Dutch tax system 2021

In 2021, a lot is about to change within the Dutch tax system. Below we have listed a couple of important topics that can impact your personal tax situation. 

Transfer Tax

From 2021, home buyers under the age of 35, who buy their first house and starting to live in it themselves, will not have to pay a one-off transfer tax. That saves them 2% of the purchase price. From April 1, 2021, the additional condition applies that the home may not be more expensive than 

€ 400,000. Buyers aged 35 or older who are going to live in the house must pay 2%. Other buyers, such as investors, are going to pay 8%. This should support the people in the search for their first house. 

Savings

Savers and small investors with assets up to € 50,000 (or € 100,000 with a tax partner) will no longer pay tax on those assets from 2021. The rate of the tax will increase slightly from 30% to 31%. As a result, everybody with savings or invested capital up to € 220,000 (or € 440,000 with a tax partner) will pay less tax on it. 

Tax credits

The general tax credit will increase by € 126. In 2021, the basic income tax rate will decrease from 37.35% to 37.10%. Also, the elderly person's tax credit will be increased.

In 2021, the maximum income-related combination tax credit will be reduced by € 66 to € 2,815. A decision of the Supreme Court entitles a wider group of co-parents to the income-related combination tax credit. In order to keep this affordable, the government will therefore reduce this discount once in 2021. The people who will benefit of this the most are the employees with an income between €28.000 and €35.000. 

SMEs 

More businesses will pay the lower corporation tax rate in the coming years. From 2021, the low rate of 15% will apply to profits up to € 245,000 instead of € 200,000. 

For personal businesses, like the sole trader, the self-employed deduction will be gradually phased out in the coming years. As of 1 January 2021, the self-employed deduction will be reduced from € 7,030 to € 6,670. This should create a level playing field between small-entrepreneurs and employees in the future. 

Driving electric:

When buying a car with your business there will be a possibility that you need to pay taxes for the circumstances that you use the car for personal purposes. Next year the tax on electric cars bought for private use as well, will rise from 8% in 2020 to 12% from 1 January 2021. The new maximum car catalogue price for this advantageous tax rate will also be €40,000 next year (instead of €45,000 in 2020). Cars over this value will be taxed at the usual rate of 22%.