Budget Day 2020
Budget Day 2020 was different from what we are used to. However, important intentions for 2021 were discussed. As usual, they discussed the expected fiscal changes as well. In this article, we will explain the most important fiscal intentions for 2021. It’s about intentions, so they have to be approved first.
Tax credits
The intention of the cabinet is to change certain tax credits in 2021
- The general tax credit will go from €2,711 in 2020 to €2,837 in 2021. This will be beneficial for people with an income up and until €68,507.
- The maximum labour rebate will go from €3,819 in 2020 to €4,205 in 2021.
- The elderly rebate will go from €1,622 in 2020 to €1,703 in 2021. This will be beneficial for the elderly with an income up and until €49,000.
- The income-related combination tax credit decreases from €2,881 in 2020 to €2,815 in 2021. In 2022, this amount will increase with €77 again.
Transfer tax
The intention is to get rid of the transfer tax for starters on the housing market ageing between 18 and 35 years. They intended to do so earlier, but it seems to be the case that it will happen in 2021. However, for investors, the transfer tax will increase to 8% in 2021. The aim of this plan to give starters more space in the housing market.
Changes in box 3
The taxation in box 3 will change significantly.
- The tax-free exemption is €50,000 if you do not have a fiscal partner and €100,000 if you do have a fiscal partner.
- The tariff will increase from 30% in 2020 to 31% in 2021.
Besides that, the flat-rate yield and the tax brackets will change. You can see the amounts and tariffs for 2021 in the table mentioned below.
| Capital on reference date 1-1-2021 in excess of the tax-free allowance | Flat-rate yield | Tax (tariff 31%) as a percentage of your capital |
|---|---|---|
| Up to € 50,000 | 1.90% | 0.59% |
| € 50,000 – € 950,000 | 4.50% | 1.40% |
| From € 950,000 | 5.69% | 1.76% |
The result of the changes is that people with capital up and until €220.000 pay less tax. Or €440.000 if you have a fiscal partner. Do you own more? In that case, you will pay a higher amount on tax.
Tariffs box 1
In 2021, the tax tariff will decrease to 37.1% for income up and until €68,507. The tariff for the second tax bracket will remain the same.
| Income | Tariff 2021 |
| Less than € 68.507 | 37.1% |
| More than € 68.507 | 49.5% |
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