Main tax measures of the 2023 Tax Plan for international organisations

Personal income tax box 3

Legal redress 2017 to 2022

The government introduces a previously announced new system for calculating the Box 3 income from savings and investments: the flat rate savings method. This legislation is a result of the judgement of the Dutch Supreme Court with regard to Box 3, in which it was concluded that the government must offer legal redress to taxpayers with a lower actual return than the (deemed) fixed return. The legal redress applies to (1) taxpayers who were part of the mass appeal procedures; (2) taxpayers whose tax assessments for the years 2017 to 2020 have not yet been irrevocably determined on 24 December 2021; and (3) all taxpayers for the years 2021 and 2022. You can read more about this topic in our in-depth article entitled 'Box updates Dutch Tax Plan 2023' and our webpage ‘Box 3 guide’.

Legal redress based on the flat rate savings method

The legal redress is based on the flat rate savings method. It involves assets being divided into three asset categories with each of them having their own fixed return percentage, namely bank balances including cash (2021: 0.01 per cent), other assets (2021: 5.69 per cent) and debts (2021: 2.46 per cent). The definitive percentages for 2022 still have to be determined. A new amount of income from savings and investments will then be calculated taking into account the tax-free allowance. If the newly calculated income is lower than the original Box 3 income calculation, the lower amount will be taken into account. The legal redress can only lead to a lower income from savings and investments (thus not to a higher income).

Although, according to the government, the flat-rate savings variant reasonably implements the 'Christmas ruling' of the Dutch Supreme Court, taxpayers with returns lower than the applied flat rates may still feel disadvantaged and thus file an objection.

Legal redress for non-objectioners?

The government has decided not to offer legal redress to non-objectioners, i.e. taxpayers for whom the definitive personal income tax assessment for 2017 to 2020 has been imposed and for whom the objection or appeal period has expired. The Dutch Supreme Court had already ruled that the government is not obliged to grant legal redress to this category of taxpayers. As a result, the Minister of Finance had the last (discretionary) word in terms of offering legal redress. It has been decided that this will not be provided. 

Nevertheless, there is a formal possibility for any taxpayer to raise the issue again. Up until 5 years after the end of a tax year, you can file a so-called request for ex officio reduction. For 2017, this deadline expires on 31 December 2022. For the years 2018 and beyond, it is one year later each time. Since this possibility seems to be used en masse, the state secretary has created a 'mass objection plus' procedure, which would make it unnecessary for taxpayers to file an ex officio reduction request. If the court should eventually decide that legal redress should also be granted to non-objectors, the Tax Administration will grant this redress to all Box 3 taxpayers. However, not all situations seem to be covered by this, e.g. a ruling of the European Court of Human Rights would not be covered. Therefore, it seems wise to still file an ex officio reduction request independently.

Legal redress 2017 to 2022: partner allocation and prevention of double taxation

The legal redress can lead to a situation whereby a recalculation of the aggregate income leads to an increase of the amount of tax deductible gifts or a situation where more healthcare costs become deductible. When granting the legal redress the additional portion of tax deductions will be aligned with the existing allocation of healthcare costs and tax deductible gifts that the partners reported in their tax returns. It follows from the systematics of the legislation that an objection must be filed per assessment. If only one of the fiscal partners has filed an objection, only that partner will get legal redress.

For taxpayers with foreign possessions and debts the system of preventing double taxation was not yet in line with the legal redress. For example, a different return percentage applies. The rules for preventing double taxation are now to be adapted in line with the rules of the redress.

Actual return as of 2026

A new Box 3 system based on actual return, such as interest, dividend and rental income and value developments is aimed to be introduced as of 2026.

In the second quarter of 2023, it will be determined as of when the legislation for the new box 3 system can actually be implemented. The schedule for the implementation process will be drawn up after the completion of the implementation test.

Bridging legislation for 2023, 2024 and 2025

The government has drafted Box 3 bridging legislation for 2023, 2024 and 2025 based on the flat rate savings method which is being used for the legal redress (see above). Taxation will take place on the basis of fixed returns over the actual mix of assets from the three categories, namely bank balances, other assets and debts. The biggest difference with the period from 2017 to 2022, in which the legal redress can only lead to a lower income in Box 3, is that taxpayers may also have to pay more tax in 2023-2025 than in the current system.

Bridging legislation fixed return percentages

Following the allocation of the assets across the three asset categories an individual fixed return percentage is applied to each category:

• As far as the bank balances (including cash) are concerned the percentage is based on the average monthly interest percentage on deposits by households with a cancellation period of no more than three months during the period from January to November of the current calendar year, whereby the month of November is counted twice. This therefore means that the return percentage is only definitively established at the end of the calendar year.
• In the case of the 'other assets' category the return percentage is based on the long-term return of immovable property, shares and bonds. A share in an owners' association (VvE) 'piggy bank' and leased land with statutory maximum rent of 2 per cent also falls in this category.
• In the case of the debts category the return percentage is based on the average monthly interest on the total outstanding amount of property mortgages of households for the current calendar year. This percentage is also only known at the end of the tax year.

Bridging legislation green investments

Green investments must be divided into green bank balances and green investments. The green bank balances fall into the 'bank balances' asset category which is subject to the low fixed return percentage. The green investments fall into the 'other assets' category which is subject to a higher fixed return percentage. If a taxpayer invests in both asset categories, the exemption for green investments will first be applied to the green investments and any remaining part of the exemption will then be applied to the green bank balances. This sequence with regard to applying the exemption is to the taxpayer's benefit.

No loss relief in box 3 bridging scheme

There is no possibility of loss relief in the box 3 bridging scheme. This applies both within box 3 and between boxes. Loss relief only suits a system of taxation based on actual returns.

Incremental increase in rate and increase in tax-free assets

The Box 3 tax rate is to be increased in 1 per cent increments from 31 per cent in 2022 to 34 per cent in 2025. The tax-free allowance is to be increased from EUR 50,650 to EUR 57,000 per taxpayer. For partners this means that the tax-free assets limit is to be increased from EUR 101,300 to EUR 114,000. 

The system automatically divides the tax-free assets proportionally among the three assets categories of bank balances, other assets and debts. Thus, taxpayers cannot choose which asset category to apply the tax-free assets to.

Vacant possession ratio not abolished, but amended

The vacant possession ratio is a valuation method for rented houses. This vacant possession ratio is to be amended instead of abolished, as was announced in the Coalition Agreement. The percentages are updated in the table and the intention is to do so regularly - say once every five years - in the future. In the case of an annual rent of more than 5 per cent compared to the value under the Real Estate Assessment Act (WOZ), the percentage of the vacant possession ratio is to be increased to 100 per cent. Temporary leases are excluded. If upon expiry of a fixed-term lease, a new contract is entered into consecutively, or if the landlord does not inform the tenant in time about the end of such a lease, a lease is no longer temporary and the vacancy ratio will apply. Furthermore, when leasing to related parties, the highest percentage (100 per cent) applies, rendering the vacancy rate de facto ineffective for these situations.

Wage tax

Tax-free travel allowance

The tax-free travel allowance is to be increased from 19 cents to 21 cents per kilometre. It is to be further increased to 22 cents per kilometre as from 2024.

Home office expense allowance*

The tax-free home office expense allowance has been indexed and raised to EUR 2.15.

Increased budget work-related costs scheme (WKR) 

The discretionary scope of the work-related costs scheme (WKR) is to be temporarily increased to 3 per cent in 2023 over the first EUR 400.000 of the taxable wage bill. As of 2024, the temporary increase will expire and a rate of 1.92 per cent will apply again. Over the remainder of the taxable wage bill 1.18 per cent will apply.

30% ruling: reimburse actual expenses or 30% ruling

Subject to certain conditions employers can reimburse extraterritorial costs tax-free to expats. This can be done on a declaration basis or via the 30% ruling. However, these facilities can no longer be used alongside each other in a single calendar year, except in the first four months of employment.

30% ruling: wages limited to 'Balkenende' standard

As of 1 January 2024 the 30% ruling can be applied to a maximum of the standard under the Standards for Remuneration Act (WNT-norm) (2022: EUR 216,000). In the case of expats who are already using the 30% ruling in 2022, the cap is only going to take effect as of 1 January 2026. Please also read our in-depth article.

Stock options* 

Liquidity problems arising when exercising stock options which cannot be sold are to be resolved by deferring the moment of taxation. You can read our previous article here.

Abolition of efficiency margin for customary wages

The efficiency margin for the wages of a director and majority shareholder (DGA) has been abolished in its entirety. As a result, the customary wage will become at least equal to the wage of the highest-earning employee within the organisation or at least equal to the wage of the most comparable employment outside the organisation. In addition, the statutory minimum lower limit still applies.

Increased burden for employers due to higher maximum income for Dutch employees' insurance

The maximum income over which Dutch employee's insurance contributions are calculated will rise from EUR 59,706 (2022) to EUR 66,956 in 2023. As a result, employers could have a (potential) additional burden of more than EUR 1.600 per employee. Read more in our article.

Lower Disablement Benefits Act contribution

By way of reducing the burden on small employers, it was proposed that the contribution rate of the Disablement Benefits Act (Dutch: Aof) would be reduced by approximately 0.5 percent compared to the usual adjustment. However, as the state secretary has taken several measures to accommodate SMEs the proposed reduction has been affected. Ultimately, the rate of the Disablement Benefits Act small employers has been set at 5.82 percent.

Fines do not qualify as negative wages

When determining an employee’s wages, recovering fines and penalties is now explicitly excluded. This specification has been introduced to prevent any ambiguity concerning the qualification of such payments.

Corporate income tax

Temporary allowing of random depreciation in 2023

In 2023, a maximum of 50 per cent of the acquisition or production costs of newly designated business assets may be depreciated at random. This previously announced scheme for at-random depreciation of assets in 2023 has been published with the Year-end regulation 2022 of 27 December 2022.

Certain business assets are excluded from the scheme, for example vessels, buildings and intangible assets. The choice for discretionary depreciation in 2023, also affects the deferrals to be included in the 2023 financial statements (and quarterly reports). Read more in the Tax News Release 'In 2023 you can depreciate ‘at random’, read the conditions'.

Rate and bracket limit

The limit for the first bracket will be lowered from EUR 395,000 (bracket limit since 2022) to EUR 200,000. As a result, businesses are more likely to pay the high corporate income tax rate of 25.8 per cent. In addition, the step-up rate for that first bracket is going to increase from 15 per cent to 19 per cent.

Payment discount on provisional corporate income tax assessment no longer applicable*

The payment discount which applies if a provisional corporate income tax assessment is paid in one go will no longer be applicable as from 1 January 2023.

Real estate measure for fiscal investment institutions (“fbi’s”)

The government has announced that, as of 1 January 2024, a measure is to be introduced on the basis of which fiscal investment institutions will no longer be able to invest directly in real estate (real estate measure). The real estate measure is intended to ensure that profits earned from real estate can, in all cases, be taxed with corporate income tax. The intention is that the real estate measure is included in the 2024 Tax Plan package. In the time ahead the government is going to investigate the desirability of the measure as well as any accompanying measures.

Linking provision for fiscal old age reserve (FOR) repealed 

The reference in the Corporate Income Tax Act 1969 to the FOR in the Income Tax Act 2001 has been repealed. This was prompted by the phasing out of the FOR in the Income Tax Act 2001.

Mining Act

The rate of the special levy that oil and gas operators pay, will be temporarily increased. The levy will be 65 per cent for 2023 and 2024, on the turnover insofar as realised with the sale of natural gas at an average price higher than 50 eurocents per m³. The tax-free base and regular rates will remain the same, so that the position of licence holders will not deteriorate and the infringement of property rights (ECHR) will be limited.The result from hedge contracts will be concluded in the calculation of the levy. Without this measure, the temporary increase in the levy could have a disproportionate impact.

Climate and energy

Temporary VAT rate reduction on energy supplies ends this year.

The temporary application of the nine percent VAT rate on energy will end this year. The temporary measure will not be prolonged after 31 December 2022. The applicable VAT rate will return to 21 per cent.

Temporary solidarity contribution

A temporary solidarity contribution for companies with activities in crude oil, natural gas, coal and petroleum refining is introduced. This contribution is designed in line with the EC Regulation. The way the excess profit is calculated is also in line with the regulation. Those excess profits are taxed at a rate of 33%.

Temporary mandatory cap on market revenues of electricity generators

The EU Regulation requires Member States to cap market revenues of producers generating electricity from sources listed in the Regulation for seven months from 1 December 2022. For the Netherlands, this includes electricity generated from wind, solar, hydro, biomass, biogas, waste and nuclear power. The levy takes effect retroactively as of 1 December 2022.

Tightening up of CO₂ levy for industry (parameter change)

In line with the CO₂ levy for industry  and the new EU ETS benchmarks, the national reduction factor is to be recalibrated as of 1 January 2023. In addition the reduction factor, and therefore effectively the number of dispensation rights, is to be tightened up. The proposed reduction factor for 2023 is going to be 1.213. The annual decrease in the reduction factor is rising to 0.078 per year.

The rate of the CO₂ levy rate will not change with respect to 2023 as it was already fixed (amounts to 41.75 euros per tonne of carbon dioxide equivalent). The government plans to determine in 2024 whether the CO₂ tax rate should be higher from 1 January 2025.

CO₂ minimum price for industry

The current minimum price for emissions which are not covered by a dispensation right increases every year. A CO₂ minimum price will be introduced for the emissions of industrial companies which are covered by dispensation rights. 

The CO₂ minimum price has been set at the same amount as the minimum CO₂ price for electricity generation and will increase on a linear basis from 16.40 euros in 2023 to 31.90 euros per ton of CO₂ in 2030. The CO₂ minimum price is only applicable if the EU ETS forward rate is lower than the CO₂ minimum price for that year.

Energy tax climate incentive postponed for a year

The increase in the price of natural gas and the reduction in the price of electricity as a climate incentive are to be implemented as from 2024, instead of 2023. As a result, businesses which are being impacted the most by the high gas prices will have more time to change their processes and their costs will not be further increased in 2023.

Energy tax: first bracket 2024

As of 2024 a new first bracket in the energy tax for electricity and natural gas will be introduced (Environmental Resource Tax Act). 

Electricity 2024

The new first bracket covers 0-2,900 kWh (the current width is 0-10,000 kWh). The new second bracket runs from 2,900 to 10,000 kWh. The other bracket lengths remain the same.

Natural gas 2024

The new first bracket covers 0-1,200 m3 for natural gas (the current width is 0-170,000 m3). The new second bracket will therefore run from 1,200 to 170,000 m3 of natural gas. The other bracket lengths will remain the same.

Block heating 2024

The existing threshold for claiming the block heating refund scheme of 5,372,000 megajoules (the heat equivalent of 170,000 m3) will be removed in view of the problems of smaller users. What becomes important is whether, if the user would have been supplied with a quantity of natural gas corresponding to the heat consumed, the tax amount that follows from application of the block heating tariff is higher than the tax amount that follows from application of the regular tariff or tariffs. If that is the case, then the user can apply for a refund.

Reduced energy tax rate for charging stations

To prolong the current favourable tax regime for charging stations in 2023 and 2024, it has been proposed (subject to European Commission approval) that the amalgamation of energy tax and ODE as of 1 January 2023 should not apply to public charging stations. There will be separate EB rates for each of the four brackets for consumption of electricity via public charging stations.

Reduction cap additional tax advantage for company cars that are used privately

With effect from 2022, the cap on the addition of taxable income (the list price on which the maximum discount on the addition of taxable income for emission-free passenger cars applies) has already been reduced. As of January 1, 2023, the cap will be further reduced from 35,000 euros to 30,000 euros.

Extension of the reduced tax tax on unleaded petrol, diesel and LPG

As of 1 April 2022 the government reduced the tax on unleaded petrol, diesel and LPG in order to mitigate the increase in energy prices. The tax reduction is to be extended until 30 June 2023. The rate will slowly increase again during the second half of 2023.

Increase budget EIA and MIA/Vamil

The EIA and MIA/Vamil are fiscal investment facilities in the income / corporate income tax for qualifying investments in energy efficient and environmentally friendly technologies. 

The EIA will structurally increase by 100 million euros per year from 2023 and the increase in the MIA is 50 million euros per year.

Sustainable energy surcharge tariffs and integration of these tariffs into energy tax

The sustainable energy surcharge tariffs have been laid down in law up to and including 2022. As from 2023 these tariffs are going to be integrated into the energy tax rates and will therefore no longer be included on energy bills. 

Temporary price cap for energy

The temporary price ceiling will be introduced for all households and part of SMEs. This price ceiling will apply from January 1, 2023 to December 31, 2023. 

The maximum tariff will be 1.45 euros per m3 of gas and 40 cents per kilowatt-hour of electricity for a maximum annual consumption (volume) of 1,200 m3 of natural gas and 2,900 kilowatt-hours (kWh). These maximum tariffs concern the variable supply tariffs per m3 and kWh (including energy tax and VAT. Those who consume more pay the market price to the energy company for the excess.

The reduction in energy tax proposed for 2023 will not apply due to the fact that the price cap will take effect.

Specific temporary subsidy scheme (TEK) for energy-intensive SMEs

The additional Energy Cost Contribution (TEK) is based on the energy consumption and turnover of an (energy-intensive SME) entrepreneur. 

To be eligible for the TEK scheme, it must be an SME with a minimum energy intensity of 7 per cent. There is no minimum energy consumption threshold. The maximum reimbursable price is 2.00 euros per m3 of gas and 0.60 euros per kWh of electricity. The cabinet is still considering whether conditions can be attached to the TEK based on, for example, turnover growth or profitability. 

The subsidy period runs from 1 November 2022 to 31 December 2023. The relief can be applied retroactively.

Tax deferral TEK

Energy-intensive SMEs with liquidity problems in the period up to obtaining the TEK actually can apply for (general) tax deferral. The policy around tax deferral for entrepreneurs has been relaxed with effect from 1 October 2022.

Relief for small consumers November and December 2022

Small consumers will receive a concession of an average of 190 euros per connection in November and December 2022 through the energy suppliers as a discount on their energy bills. For this concession, energy suppliers will receive a one-off subsidy for the discount paid.

Increase in flight tax

The rate of the flight tax is to be increased as of 2023 from EUR 7.95 to EUR 26.43 per departing passenger (transfers excluded). 

Gift and inheritance tax

Vacant property ratio not abolished, but amended

The vacant property ratio is a valuation method for rented real estate. This vacant property ratio will not be abolished, as was announced in the coalition agreement, but will be amended. The percentages are updated in the table and the intention is to do so regularly - such as every five years - in the future. In the case of an annual rent of more than 5 per cent compared to the value under the Real Estate Assessment Act (WOZ), the percentage of the vacant property ratio is to be increased to 100 per cent. Temporary leases are excluded. If upon expiry of a fixed-term lease, a new contract is entered into consecutively, or if the landlord does not inform the tenant in time about the end of such a lease, a lease is no longer temporary and the vacancy ratio will apply. Furthermore, when leasing to related parties, the highest percentage (100 per cent) applies, rendering the vacancy rate de facto ineffective for these situations.

VAT, Consumption tax & Excise

Zero VAT rate on solar panels

The zero VAT rate applies to the supply and installation of solar panels and solar panels used as roofing materials. The zero VAT rate only applies if the solar panels are intended to be installed on or in the immediate vicinity of private dwellings or housing.  

Temporary VAT rate reduction on energy supplies ends this year.

The temporary application of the nine percent VAT rate on energy will end this year. The temporary measure will not be prolonged after 31 December 2022. The applicable VAT rate will return to 21 percent.

Excise duties on beer will increase

The minimum rate of excise duty on beer will increase from 8.83 euros to 20.20 euros per hectolitre. As of 1 January 2024, this minimum rate will further increase to 22.67 euros. Furthermore, from 2024, the base for calculating the excise duty will change from percent degrees Plato to alcohol content.

Consumption tax on non-alcoholic drinks

The proposed rate increase from 1 January 2023 of the consumption tax on non-alcoholic beverages will not go ahead. In 2024, this consumption tax will now be increased in one go. Since the lowest rate of beer excise duty (light beer) is at par with the consumption tax rate, there is no increase in 2023 for this group either. 

From 1 January 2024, the rate for both groups will be 26.13 euros per hectolitre, excluding mineral water.

Excise duties on tobacco will increase

Tobacco excise duty increases on 1 April 2023 and 1 April 2024. The total increase in the excise duty on smoking tobacco thus amounts to 55.73 euros on 1 April 2023 and 55.74 euros per 1,000 grams of smoking tobacco on 1 April 2024. 

As a result of this additional increase, the rate will be 216.64 euros on 1 April 2023 and 266.98 euros per 1,000 grams of smoking tobacco on 1 April 2024.

Transfer tax and other

Transfer tax rate on non-residential properties to increase

The transfer tax on non-residential properties and acquisitions of properties by legal entities and private parties that are not going to live in these properties for the long term is to be increased from 8 to 10.4 per cent. 

Abolition of landlord charge

The landlord charge will be repealed in its entirety in 2023.

Gambling tax rate

The general gambling tax rate will increase structurally from 29 per cent to 29.5 per cent.