Prinsjesdag 2022: things you need to know as a freelancer
Yesterday, the Dutch government presented the Tax Plan 2023, containing the financial plans for the year ahead. What do these plans mean for you as a self-employed person? We’ve listed the most important things for you.
Phasing out the private business ownership allowance
The phasing out of the private business ownership allowance has already been set into motion in previous years. In 2022, private business ownership allowance will still be € 6,310. From 2023, the Dutch government wants to further reduce this deductible item, to €1,200 in 2026 and lower it to €900 in 2027. Below schedule shows the steps per year:
Abolition of the fiscal retirement reserve (FOR)
The FOR is a scheme that allows entrepreneurs to build a pension by setting aside part of their profit. From 1 January 2023, entrepreneurs can no longer (continue to) build up their retirement reserve. The retirement reserve that has been built up up to and including 31 December 2022 will be settled according to the current rules.
Income tax goes down
In 2023, the government wants to reduce the tax on income from work up to €73,071 (box 1) from 37.07% to 36.93%. This will result in a maximum of €102 per year extra for workers.
General tax credit goes up
The general tax credit reduces the income tax for everyone with a job. The government is planning to increase the general tax credit annually from 1 January 2023. With this higher general tax credit, workers would benefit by €500 annually from 2023. Both employees and the self-employed will benefit from this.
Abolish income-related combination tax credit (IACK)
The government is planning to abolish the IACK from 1 January 2025. This tax credit is intended to make combining a job and caring for children financially attractive for parents. In order to continue to encourage parents to combine work and the care for children, the childcare allowance will be adjusted in such a way that the IACK is no longer necessary. For the time being, the tax credit will remain in effect for parents with 1 or more children born before 1 January 2025.
Temporary legislation box 3
From 2026, a new system for tax box 3, in which the actual return on capital is taxed, will come into effect. The government will work with temporary legislation for the intervening years, which is based on the actual distribution of savings, investments and debts. For this, the Tax and Customs Administration uses return percentages that are close to the real percentages for savings, investments or loans. This way, personal savings and investments will be assessed more accurate.
Before the government is allowed to implement any of these plans, parliament (the Senate and House of Representatives) must assess and approve them. If parliament approves, the new plans will usually come into effect on 1 January of the following year.
Written by: Michiel Brouwer