Dutch income tax
Box 1
The cabinet wants to lower the first tax bracket in Box 1. Therefore, the tax burden on your income up to €70,000 will be reduced. In addition, the plan is to increase the labour rebate (tax credit).
Box 3
People with savings and investments exceeding the threshold will have to pay more tax on their assets in 2023 (box 3). The tax rate in box 3 is expected to be gradually increased from 31% to 34%. In addition, the box 3 levy is going to change.
Averaging scheme abolished
People with savings and investments exceeding the threshold will have to pay more tax on their assets in 2023 (box 3). The tax rate in box 3 is expected to be gradually increased from 31% to 34%. In addition, the box 3 levy is going to change.
Increase in transfer tax
On houses that are bought as an investment or holiday house, or the like, you pay the increased transfer tax of 8%. This transfer tax is expected to be increased to 10.1% as of 1 January 2023.
The transfer tax for an owner-occupied home remains 2%. For starters, there is an exemption from the transfer tax for homes up to €400,000. From 2023, this home value limit will be increased to €440,000.
Tax credits and benefits
Abolition of IACK
The income-related combination tax credit (IACK) is a tax discount to encourage single people and the least-earning partner to work more. However, it will be abolished in 2025. Parents with children born before 2025 will continue to be entitled to the IACK.
General tax credit based on total income
Everyone who pays tax in the Netherlands is entitled to the general tax credit. The amount of the general tax credit currently depends on your income from work and home (box 1). The government plans to phase out this tax credit from 2023 based on the total income (boxes 1, 2, and 3 combined).
Limitation 30% ruling
The 30% ruling is a tax benefit for foreign employees who come to the Netherlands to work. If the conditions are met, the employee does not have to pay tax on a maximum of 30% of his or her salary. The plan is to limit the 30% ruling to the so-called Balkenende norm (salary cap), with a transitional arrangement of three years.
Child budget, rent allowance, and health care allowance up
Allowances go up:
- Healthcare allowance with more than €400
- Rent allowance with €200
- The child’s budget is income-related. The cabinet has reserved €750 million for this.
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