Prinsjesdag (Budget Day) 2023: covering the year 2024
True to tradition, the Dutch Tax Plan for 2024 was presented yesterday on Prinsjesdag. Since we currently have a caretaker government, most of the plans for next year have been deployed a bit more cautiously than is normally the case. Still, there is something to report for entrepreneurs. What should you take into account in the coming period? We list the most important topics for you.
As in 2023, the mileage compensation will again be increased in 2024. From 1 January 2024, the compensation will be increased to € 0,23 per business kilometer. Previously, it was € 0,21. However, this only applies when you make business kilometers with your private car and/or bicycle.
The phasing-out of the self-employed deduction had already started in previous years. This deduction will be further reduced, going from € 5,030 in 2023 to eventually € 900 in 2027. In 2024, the deduction will be € 3,750. The deduction is being phased out to reduce the tax differences between working as an employee and as an entrepreneur.
SME profit exemption
One of the deductions you are entitled to as an entrepreneur is the SME profit exemption. This means that you do not have to pay tax on a portion of the profit. This ‘exemption’ is reduced from 14% to 12,7%.
Box 1 consists of two brackets with different tax rates. The rate in the first bracket, which runs up to an income of €75.624, will be 36,97% in 2024. This is 0,04 percentage higher than in 2023. The rate in the second bracket, i.e. on income above €75.624, will remain unchanged at 49,50%.
Every working citizen of the Netherlands receives a rebate on his or her income tax: the so-called Employment Credit. This is part of your Income Tax Credit. One of the measures in the purchasing power package is to increase this discount. The Employment Credit will be increased by €115 and the maximum benefit you can get will be €5.553.
The payment discount for paying the provisional income tax assessment in one go in its entirety will be discontinued.
Recently, there has been much to do about the calculation of tax on box 3. Currently, you pay tax based on a fictitious return on the value of your private assets, on the reference date of January 1st. According to the legislation, this is incorrect, and your tax should be calculated based on your actual return. These new rules were supposed to take effect in 2026, but this has been postponed to 2027. In the meantime (2022-2026), there is a transitional arrangement. Because of this postponement, there are lost revenues that need to be absorbed. For this reason, the tax rate in box 3 goes up to 34% in 2024 (previously it was 32%).
Of course, these are the most important changes for you as an entrepreneur in a nutshell. Are you unsure whether the items above apply to you or do you have any questions? Feel free to contact your bookkeeper for more information.