Most important tax changes in 2023
The Dutch Senate approved the government’s tax plans for 2023 in December 2022. So what do these plans mean for employers? We’ve set out the most important changes for you below.
Income tax
Various changes are being made to improve workers’ financial position. These include reducing the rate in the first income tax band (on income up to €73,031) to 36.93%. The basic employment tax credit has also been increased this year. This is being funded by reducing the employment tax credit on income above €37,697 more rapidly (by 6.51% of income from work).
Maximum tax-free travel allowance
From 1 January 2023, the maximum tax-free travel allowance increased from €0.19 to €0.21 per kilometre. Alternatively, you can reimburse employees using public transport to travel to and from work for the travel costs they actually incur.
Share options
From this year, employees working for a start-up or scale-up business and who receive share options from their employer instead of salary can choose when they want these options to be taxed. Either, for example, when the shares become tradable or at an earlier date.
Tax averaging to end
To make the tax system less complex, it has been decided to end the tax-averaging arrangements from 1 January 2023 and also the exemption from the normal salary rules that innovative start-ups were previously eligible for. In addition, entrepreneurs can no longer add to their tax-facilitated pension reserve. But they can convert their existing pension reserve into an annuity.
Corporate Tax
This year has also seen changes in the tax bands and the basic corporate tax rate. The lower tax rate, for example, now applies only to profits of up to €200,000 (previously: €395,000) and the applicable rate has increased from 15% to 19%. The rate applying in the second band is still 25.8%.
Work-related expenses scheme
Various changes have been introduced to reduce businesses’ costs and encourage investments. These include temporarily increasing the discretionary scope (i.e. the amount that can be paid tax-free) in the work-related expenses scheme (WKR) to 3% on a total wage bill of up to €400,000. The discretionary scope above that level is 1.18%.
Capital
As well as calculating the tax payable on capital in box 3, the government has changed the amount payable. From 2023, savings, investments and debts will be taxed on the basis of actual allocations. And then based on yield percentages close to the actual yields. The capital yield tax allowance in box 3 is also being raised to €57,000, while the rate at which tax is payable on capital above the allowance has increased from 31% to 32%.
