Private individuals

In the area of income tax, changes are being made in particular to the rates in boxes 1 and 3. Box 3 especially will be worth keeping an eye on. What are the main changes?

Subjects

Rates in box 1
Increase in employed person’s tax credit
Box 3 – Savings and investments
Gift from a company is no longer a fictitious dividend
Periodic gift and loss of ANBI status
Averaging of income in box 1 to be scrapped
Abolition of income-dependent combination tax credit from 2025
End of payment discount for income tax
Exemption of ‘leefvervoer’ provided via UWV will now not be capped
No revision interest when surrendering an annuity in the event of incapacity for work
Change to lucrative interest scheme
Child-based budget

Rates in box 1

De belastingheffing over inkomen uit werk en woning wordt op diverse punten verhoogd:

De inkomstenbelasting in box 1 kent twee schijven. Vanaf 2024 wordt de tweede schijf minder geïndexeerd dan de inflatie. De indexatie is 3,55 in plaats van 9,9%. Daarmee wordt de tariefschijf verlengd van € 73.071 naar € 75.624. Voor gepensioneerden bestaat de inkomstenbelasting voor inkomen uit pensioen uit drie schijven. De tweede en derde schijf worden ook met 3,55% geïndexeerd in plaats van met 9,9%;
Het tarief in de eerste belastingschijf neemt in 2024 toe met 0,04%: van 36,93 (2023) naar 36,97%.

Increase in employed person’s tax credit

The employed person’s tax credit is increasing by € 115 for incomes around the statutory minimum wage. This will benefit employees with gross salaries of up to almost € 40,000.

Box 3 – Savings and investments

As things stand, the aim is for actual returns to be taxed in box 3 from 2027 onwards. Until that time imputed returns will continue to be taken as a basis. There are three categories: bank and savings balances, investments and debts.

From 2024 it will be stipulated by law that shares in homeowners’ associations (VvEs) will fall under the category of bank and savings balances. Do you own a flat? If so, this may mean that you will pay less tax in box 3. This ‘reclassification’ will also apply to funds held in a notary’s client accounts.

The tax-free allowance in box 3 is not being adjusted for inflation. In addition, the rate in box 3 will be rising from 32% (2023) to 34% in 2024.

	Bank balances (savings)	Other assets	Debts
2022	-0.01%	5.53%	2.28%
2023	0.01%	6.17%	2.46%
2024	Not yet determined	Not yet determined	Not yet determined

Tip!
On 18 September 2023 the Advocate General concluded that the Box 3 Reparations Act (Wet rechtsherstel box 3) also infringed the prohibition of discrimination and the right to property. If the Supreme Court follows this advice, this may have consequences for your box 3 income. You should therefore make sure you lodge an objection in good time to safeguard your rights.

Please note!
In 2024 claims and debts that exist between tax partners and between parents and minor children will not belong to any category, as they will no longer be subject to tax. It will therefore be possible to omit them entirely from your tax return.

Gift from a company is no longer a fictitious dividend

Companies that are subject to corporation tax can make business and non-business gifts. Non-business gifts are gifts made on the basis of a shareholder motive, i.e. without a direct business interest in mind.
Up to the end of 2023 a gift based on a shareholder motive is regarded as a fictitious distribution of profit from the company to the shareholder. The shareholder has to pay dividend tax and box 2 income tax on this distribution. Under certain conditions the shareholder can deduct this gift from his or her income tax.

It has been decided that gifts will no longer pass via the shareholder, but will instead be made directly from the company. On the other hand, they will no longer be deductible from the taxable profit within the company.

Periodic gift and loss of ANBI status

If an ANBI (public benefit organisation) gets involved in a dispute with the Tax and Customs Administration about whether its purpose and/or actual activities serve the public interest, the inspector can revoke the ANBI status. A periodic gift is only deductible for income tax purposes if it has been made to an ANBI by means of a notarially executed or private deed. The general rule is that once ANBI status has been lost such periodic payments are no longer deductible. From 2024 it will be clarified in law that gifts will only cease to be deductible once the opportunities for objection and appeal have been exhausted. Only then has the loss of ANBI status become irrevocable.

To avoid a gift becoming non-deductible in the event of ANBI status being lost, you can stipulate in the (notarially executed or private) deed of gift that the periodic gift will be terminated in certain situations.

Averaging of income in box 1 to be scrapped

The last years over which averaging is possible are the 2022, 2023 and 2024 tax years. This had already been included in the 2023 Tax Plan. If you apply the average income scheme, you add together the box 1 income for three consecutive calendar years and divide this by three. You then calculate how much tax you have to pay in each year on this average income. Compare this with the tax you actually paid in these three years. Is the difference greater than € 545? If so, you can claim tax back.

Please note!
Keep an eye on the deadline. A request
for averaging must be submitted within 36 months after all the final tax assessments for the calendar years you want to average have been determined irrevocably.

Abolition of income-dependent combination tax credit from 2025

The income-dependent combination tax credit (IACK) is a tax credit for single parents or lowest-earning partners who combine work with looking after young children. From 1 January 2025 this tax credit will be abolished, except for parents with (one or more) children born before 1 January 2025.

End of payment discount for income tax

The payment discount relating to provisional income tax assessments is being abolished from 2024.

Exemption of ‘leefvervoer’ provided via UWV will now not be capped

On the basis of the Social Support Act (Wet maatschappelijke ondersteuning (WMO)) the local authority is responsible in principle for providing people with transport facilities that are necessary for their day-to-day life. This kind of transport that a person needs to participate in society is referred to in Dutch as ‘leefvervoer’. It may include transport by means of a regional taxi or wheelchair-accessible taxi, an adapted car, a mobility scooter or a loaned car. We are therefore not talking here about transport to and from work or school.

The provision of ‘leefvervoer’ on the basis of the WMO is exempt from income tax. For ‘leefvervoer’ provided via the UWV (Employee Insurance Agency) there is no statutory income tax exemption. A decision was previously taken to introduce an exemption up to a maximum of 2,000 kilometres. An exemption for ‘leefvervoer’ provided via the UWV will now be included in the law without any upper limit.

No revision interest when surrendering an annuity in the event of incapacity for work

In the event of long-term incapacity for work you are allowed to surrender an annuity without having to pay revision interest (standard rate of 20%) on it. A maximum amount applies here. If you exceed this maximum amount, you have to pay revision interest on the entire sum.

In practice, this is proving to be a heavy-handed approach. In a policy decision it has therefore been specified that revision interest will only be due on the amount by which the surrender threshold is exceeded. This will also now be enshrined in law.

Change to lucrative interest scheme

The lucrative interest scheme is being adapted following a ruling by the Supreme Court. This ruling relates to the economic comparability of property rights and subordinated classes of shares. The Supreme Court ruled that the capital requirement should be followed, according to which a lucrative interest is present if the subordinated classes of shares represent less than 10% of the issued share capital. With retroactive effect from 26 June 2023 a loan that does not qualify as informal capital will also be taken into account when assessing whether a lucrative interest exists.

Child-based budget

To combat (child) poverty, the child-based budget is being increased. Through the child-based budget parents receive a contribution towards the costs of raising children. The level of the contribution depends, amongst other things, on the number of children, their ages and the level of the parents’ income and assets.

The maximum increase in the child-based budget will be € 750 for the first child and € 883 for the second child and subsequent children. For children aged between 12 and 17 the increase will be € 400.

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