Budgetday 2024
This year’s Budget Day announcements included various measures to improve the business climate and boost productivity. As a result, some or all of the previous plans to scale back various tax facilities for businesses are being scrapped.
You can find details of the main changes below.
Taxes
Corporate tax
The tax rates and bands will stay the same as in 2024.
Reduction in SME profit exemption continues
The profit exemption for sole traders and partners in general or limited partnerships will continue to go down. However, the reduction – from the current 13.31% to 12.7% in 2025 – is more limited than previously announced.
Income tax
The government will introduce a third tax band in 2025, resulting in a lower rate of tax on the first band of income in box 1.
Tax credits
The maximum general tax credit (income-dependent) will decrease from €3,362 in 2024 to €3,068 in 2025.
Deduction for gifts
The right to deduct gifts from corporate tax and the arrangements for ‘company donations’ are being abolished. From 2025, these donations will be treated as profit distributions liable for tax. However, the previously planned changes in the right to deduct gifts from income tax will not go ahead.
Business transfers
The tax rules designed to facilitate business transfers under the Business Succession Scheme (BOR) and the deferral scheme for transfers of substantial shareholdings (DSR) are going to be simplified.
From 2025, the ownership and continuation requirement will also be reduced from 5 to 3 years. This will create greater flexibility to transfer a business to new owners or the next generation without losing your entitlement to the BOR scheme. From 1 January 2026, however, access to the BOR and DSR schemes will be limited to ordinary shares and a minimum shareholding of 5%. Measures will also be introduced to counter unintended and double use of the BOR scheme.
Innovation
The budget for grants under the Promotion of Research and Development Act will increase to €1.5 billion in 2025. Under these arrangements, businesses pay less tax on research and development activities. This reduces their costs of innovating.
Business premises
The government plans to invest close to €10 million in its ‘Creating Scope for the Economy’ programme (Ruimte voor economie) in 2025. This will make it easier to retain and set up businesses at appropriate locations.
Improving the business climate
The government intends to reverse various tax measures in order to improve the business climate. This includes reversing the planned ending of the company share buyback facility, the increase in energy tax and the increased rate applying in the box 2 tax band, as well as reducing the extent of the cut in the SME profit exemption. The restriction on deducting interest from corporate tax (‘earnings stripping’) will also increase from 20% to 25% of profits.
Dividend tax repurchase facility
It had previously been proposed to abolish the dividend tax repurchase facility, but these plans have now been scrapped in order to improve the business climate. The dividend tax repurchase facility will therefore remain available.
Expat tax break
Highly skilled employees coming to the Netherlands from abroad help to improve the Dutch business climate. The government therefore plans almost completely to reverse the previously announced scaling-back in the 30% ruling for expats. Instead of a phased reduction (30-20-10%) over 5 years, the government has now opted for a flat rate of 27%. However, the standard salary limit applying under the 30% ruling will increase.
More information?
To stay up-to-date, follow us on this page. We post regular updates.
Sources:
rijksoverheid.nl/actueel
abab.nl
