The pockets of the richer will be a bit lighter after the announcement of the Dutch spring budget.
If you don’t want to read all 181 pages (in Dutch), Blue Umbrella’s experts have looked through to highlight the most important points, especially for expats.
“The government is raising money, which was to be expected after a period when money has been thrown around for the past two or three years,” says a Blue Umbrella tax expert. “Now, there is the Ukraine war, problems with gas and electricity prices and inflation: they need money.”
There are various measures that might affect expats. The 30% ruling is set to change, although the government has resisted calls to scrap it entirely. People who have been granted this tax break on the first 30% of salary after moving to the Netherlands for a job, will no longer have the tax break on income above €216,000. This change will be phased in over three years.
Saving for your pension
Another ruling is known as the ‘FOR (old age reserve)’, which had advantages for entrepreneurs with a small business, and is also being scrapped. The ruling currently means that the entrepreneur can make a reservation each year to build up a pension fund within the company – with tax advantages, and more flexibility than an official pension fund. This benefit is going to be stopped from 2023. People with a FOR saved before 2023 can still transfer the amounts to private funds based on the old regulations.
With corporate tax, the higher rate of 25.8% will kick in at profits of €200,000 rather than the €400,000 that had been planned – although this will affect bigger businesses rather than smaller entrepreneurs.
Taxing the rich
A planned increase in the tax-free threshold for personal assets (in ‘box 3’ wealth taxes) will not go ahead, so the threshold remains €50,650 per individual for savings and assets. The government has still not announced the rules for savings, after a previous ‘fictitious’ tax was ruled illegal (although it has reserved €3.6 billion to compensate savers who paid too much in previous years, and made an official protest).\=
For Box 2 the tax plan will be that, for people with more than 5% of a company’s shares, will be 26% for the first €67,000 of dividend income and then there is a new, higher 29.5% bracket. Meanwhile, for people buying a house as an investment or for a business, the transfer tax has risen to 10.1% (rather than 8%).
‘The people with a bit more money will feel the pain,’ says the Blue Umbrella expert. ‘It’s probably not bad enough to emigrate – but count your euros before you book your summer holiday!’
For advice on your personal situation, contact Blue Umbrella