Rates in box 1 – Income from employment and home

The rate applicable in the first band is being raised slightly: from 36.93% (2023) to 36.97% (2024). From 2024 the second band will be indexed below inflation. The indexation will be 3.55% instead of 9.9%. As a result, the band will be widened from € 73,071 to € 75,624. This below-inflation indexation will also apply to pensioners. The rate applicable in the second band will remain at 49.5%.

Increase in employed person’s tax credit
The employed person’s tax credit is being increased by € 115. This is on top of the inflation adjustment and means that the maximum employed person’s tax credit will therefore be € 5,553 instead of € 5,052 (2023). By taking this measure, the government wants to make work pay.

The proposed halving of the young disabled person’s tax credit will not go ahead and this credit will actually be increased by € 82. This tax credit applies to benefit recipients under the Invalidity Insurance (Young Disabled Persons) Act (Wajong) and people who are entitled to benefits while finding work under this Act.

Changes to other tax credits are shown in the table below:

Rates in box 2 – Introduction of two bands

The rate in box 2 is being split into two bands from 1 January 2024: 24.5% on the first € 67,000 and 31% on the excess amount. This change had already been included in the 2023 Tax Plan.

In box 2 tax is levied on benefits from substantial shareholdings, such as dividends that are paid to a shareholder (director/major shareholder (DGA)) and become part of his private assets. In the case of a partnership, the income from substantial shareholdings is regarded as a joint income component. As a result, both partners benefit from the low band, which means that a dividend payment of € 134,000 will be taxed at the low rate.

Example calculation with no tax partner
In the case of a dividend payment of € 500,000, the tax payable from 2024 will be as follows:

€ 67,000 * 24.5% = € 16,415

€ 433,000 * 31% = € 134,230

Total: € 150,645

Until the end of 2023 the tax payable on this will be € 134,500. 

Example calculation with tax partner
In the case of a dividend payment of € 500,000, the tax payable from 2024 will be as follows:

€ 134,000 * 24.5% = € 32,830

€ 366,000 * 31% = € 113,460

Total: € 146,290

Until the end of 2023 the tax payable on this will be € 134,500. 

Please note!
Dividend payments also affect the general tax credit, your box 3 assets and excessive loans. Talk to your advisor about whether paying a dividend now would be advantageous or whether it would be better to wait until 2024 or to pay a higher amount as a dividend later all at once.    

Tip!
Does your partner have no income? If that is the case, pay out a dividend to take advantage of the general tax credit.

Please note!
Are you a substantial shareholder with a debt of more than € 700,000? If so, you have until 31 December 2023 to reduce this debt. If you do nothing, you will owe tax in box 2 on the amount above € 700,000.

Rates in 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.

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. It will therefore be possible to omit them entirely from your tax return, with retroactive effect from 1 January 2023.

Tip!
Do you disagree with the reparations offered for the years 2017 to 2022, as your actual return is lower than the imputed return? If so, talk to your advisor about the possibilities for lodging an objection. 

Unchanged corporation tax rates

Corporation tax rates will remain unchanged. From 1 January 2024 the rate will therefore be 19% up to a taxable profit of € 200,000, with a rate of 25.8% applying above that amount.