Do you need tax advise on how to minimize wealth tax in your international living or job situation? Are you (considering) moving to the Netherlands and want to understand wealth tax implications. Or is your 30% ruling ending and do you have worldwide assets? Check the example situations or submit your own situation to us directly. One of our advisors will give you a detailed response and let you know how we can minimize your Box 3 tax obligations.

What is Box 3 tax actually?

The Dutch capital gains or wealth tax is in fact nothing more than the tax on fictitious income from savings and investments; the so-called Box 3 tax, although ‘under construction’. The reference date for taxed box 3 assets is January 1. A recent development is that due to a High Court decision on box 3, the tax authorities have confirmed that no box 3 tax assessments will be raised for the time being. We would not advise taking any action with regards to saving on box 3 taxation until there is more clarity as to how the Box 3 tax will work out. The High Court concluded that the fictitious return on investment often leads to a relatively heavy financial burden, especially if taxpayers’ assets are mostly savings.

End of 30% ruling

When your 30% ruling ends you become regularly taxable in the Netherlands for your worldwide wealth (Box 3 tax) and you will have to declare these in your tax return. Make sure you do this properly to avoid high fines. In case you are still under the 30% ruling but have not opted for partial non-domestic taxation you will also have to declare your (worldwide) assets in box 3. Dutch real estate (not the owner-occupied first dwelling) is always taxable, also during the 30% ruling period. We do recommend double-checking if you have correctly opted for partial non-domestic taxation since a mistake can be easily made. In case you forgot to opt for partial non-domestic taxation we can check what tax obligations you have.

Tax-free capacity

Not the entire box 3 capital is taxed. In 2022, the first €50,650 (double for tax partners) will be exempt. This is called the tax-free allowance. In 2021 this was still €50,000 (€100,000 for partners). Anyone who saves green and/or invests green is eligible for additional tax-free capital of €61,215 (2022).

Box 3 tax rates

In 2021, the rate on the notional return in box 3 has been increased to 31%. This rate will not be adjusted in 2022.

Below is a schematic representation of the box 3 tax in 2021 and 2022 with 4 categories of wealth bases.

Fictitious return

From 2017, a statutory regulation was introduced, changing the fictitious or fixed return. Already since 2017, the actual return that people achieve on their net wealth (excluding the equity capital on their own home) is not relevant. Box 3 has three rate brackets. However, the Tax and Customs Administration assumes that wealthy people also invest a lot. This means that, depending on the size of the wealth, it is assumed that part of the wealth is saved and part is invested (the so-called ‘asset mix’). The return that is expected to be achieved for both capital elements has been laid down by law (the fixed amount). This does not take into account the actual choice of taxpayers or the actual return. According to the tax authorities, investments yield much more, so in the fictitious world of the tax authorities, wealthy people in The Netherlands normally invest 33 to 100 percent of their wealth in shares, investment funds, or real estate. There is as yet no prospect of taxation on the wealth in box 3 over the actual income.

Saving tax in box 3  

The reference date for taxed box 3 assets is January 1, so you need to make sure the amount is as low as possible on that date. Here are a few tips to reduce your assets in a smart way before 1 January next year. It is recommended to have an expert tax consultant check which of these or other options apply to your situation:

  • If you have substantial assets, it could be an option to set up an OFGR or BV to save box 3 tax;
  • Make a gift to a relative or non-relative that will be used for the purchase, repayment, or renovation of a home that is or will be a primary residence. Till 2024 an amount of approx. € 106.671.is free of gift tax;
  • Use your savings to pay off part of the mortgage on the primary residence (box 1). In addition to wealth tax, this often also saves you some mortgage interest;
  • Deposit money into an annuity.

Example situations of declaring assets abroad

You are from the UK and your wife is Dutch. Together you have been living abroad in several countries for the last 8 years and are living in the US now. You own three houses in the UK and your wife owns a house in the Netherlands. You also own some stock options which were already taxed in both the UK and US. You are both working for a US employer. You are considering moving to the Netherlands or to the UK, but are not sure what would be best tax-wise since you have some assets abroad.

If you move you the Netherlands you will become tax liable for your worldwide income (box 1) and assets (box 3). There is no capital gains tax on, for example, shares. Since you have never lived in Since you have never lived in the Netherlands, the 30% ruling is a good option to avoid all box 3 levies for a maximum period of 5 years and to enjoy a 30% tax-free salary. For this, you need a Dutch job offer as a reason for immigration. This can be an offer from a Dutch employer, but also from an existing American employer that, for example, sets up a payroll administration in the Netherlands and can then be seen as a Dutch employer. We are happy to be of service. It is essential that you do not become a resident in the Netherlands before you have arranged a Dutch job offer. The 30% ruling does not apply to your girlfriend as she has Dutch nationality and has not been away from the Netherlands long enough. She may, however, benefit from the exemption in box 3, provided you are tax partners. With the 30% ruling, the Netherlands will undoubtedly prove to be the most favorable tax climate. It might be wise to also check this in the UK.

You are working for an international organization as an ex-pat in the Netherlands. You are not liable for income tax in the NL, but have been filing your taxes anyway for the “wealth tax”. Your American partner is still working for a US company and would like to move to the NL permanently but keep his job. You have a Dutch living together arrangement. You are looking for a reliable tax consulting company who would be able to help us in this situation and, most importantly, avoid him being heavily taxed by both countries once he moves over here.

Since you are working for an international organization it is important you can check if there is an exemption part for declaring your wealth in box 3. If your partner immigrates he will become taxable for his worldwide income and wealth. Double taxation deduction should be looked for in the US as the treaty appoints the right to tax to the country of residence. It would be most advantageous if your partner got an employment offer from an NL employer – which could be the US employer setting up as an NL employer – and consequently immigrate. In addition, this would give scope for the 30% ruling.

Inheritance tax especially, but also gift tax, can be a very complicated matter, depending on many variables. Dutch inheritance and gift tax percentages are pretty high, but there are also tax exemptions. The sooner you seek advice, the better our specialized tax advisors can work out a way for you to be able to keep as much money from the inheritance or gift as possible. We can also check if there are possibilities to avoid double taxation.

Inheritance tax return

Do you live abroad and are the testator in the Netherlands? In that case, Dutch inheritance tax must be paid. Did the testator live abroad and you in the Netherlands? Then no inheritance tax has to be paid in the Netherlands. You do have to file a declaration of the acquired assets at a later stage, box 3 tax. We are happy to be of service with advice, the declaration of inheritance tax, and/or declaration of box-3 assets.

The rate that must be paid in the inheritance tax return depends on the relationship with the deceased and the amount inherited and varies between 10 and 40%. In the case of inheritance tax, an exempt amount applies on which you do not have to file an inheritance tax return. In addition to the inheritance tax an adjusted income tax return must be submitted for the deceased in the year of death with an F-form. These are often difficult matters for the heirs, especially since they do not often occur. We can also file this F-form for you in the most tax saving manner.

Gift tax return

A gift from abroad may not fall under the Dutch tax regime. If the gift is from a non-resident or a  resident (but not a Dutch citizen) that has emigrated from the Netherlands more than a year ago, no gift tax is due. But you may become liable for “Box 3” tax as soon as the money arrives in the Netherlands. Donations are often made to contribute to the purchase of a home for the children. Now, a resident of the Netherlands (who is not a Dutch citizen) continues to be a resident, liable only for gift tax (not inheritance tax), up to 1 year after emigrating from the Netherlands.

In case gift tax is due, the person who receives the donation must together with the donor file a gift tax return, but the gift tax itself can also be taken on by the donor and be included in the donation, which then leads to a higher gift tax. With a view to the gift tax return, it is advisable to obtain tax advice on donations. We are happy to advise you on the right time to make donations and on the level of rates and exemptions. We also specialize in estate planning, where we strive to transfer your assets to the next generation in the best possible way for tax purposes.

The gift tax rates are the same as the inheritance tax, but the gift tax exemption amounts are different.

Example situations inheritance and gift tax

You want to transfer your American inheritance & social security benefits to the Netherlands. You are wondering what tax consequences there will be and how to structure things tax-wise.

Since how long have you been living in NL? Could you enlarge a bit as to the assets within the inheritance, and when you received these? As for social security, is it possible for the US to move this as a lump sum? It would also be useful if you could provide your last NL tax return so we have a complete picture of your situation.

You are living in the NL for over 10 years and are originally from the UK. Your father plans to leave you his apartment in London. You are looking for some advice regarding this and how to limit the tax exposure. You think you are not liable for tax here in the Netherlands, only in the UK as your father lives there. Another option is that he already puts it on your name. You are wondering if in that case, you would be tax liable here in NL or if you should just add the value to your box 3.

It is correct that there is no gift or inheritance tax in this case. When you become the owner of the property you will need to declare this in box 3. Based on the treaty double taxation deduction should limit box 3 taxation. We would be happy to advise you on this matter.

You are planning to buy a house in Amsterdam and your mother is willing to gift me 100k for that purpose. She is living in France. You would like to seek your advice on how to keep tax to a minimum.

If your mother does not have Dutch nationality and she has not lived in NL in the past year, there is no Dutch gift tax due. You will need to document the gift as the bank may ask questions upon receipt of the money. Also, the notary may request information regarding the source of the money.

Do you work abroad for part of the year while living in the Netherlands? The 183-day rule prevents you from paying tax on your salary in two countries and determines in which country your salary should be taxed. Would you like to know where your income will be taxed in order to prevent and/or anticipate any tax problems? Please contact us to discuss your situation.

When is the 183 rule relevant?

Most tax treaties with other countries stipulate that the country of employment may levy on the salary. However, part of these tax treaties is the 183-day rule. If applicable, the country of residence may levy tax. This applies if 3 conditions are met:

  • the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve month period commencing or ending in the fiscal year concerned; and
  • the remuneration/ compensation is paid by, or on behalf of, an employer who is not a resident of the other State; and
  • the remuneration/ compensation is not borne by a permanent establishment which the employer has in the other State.

If this is the case, the salary is not taxable in the state of employment until more than 183 days have been spent there. If not, the entire salary is taxed in the country of residence.

Often the article in the tax treaty that includes the 183-day rule is misunderstood or misapplied.

Salary in the country of residence remains taxable

Incidentally, days worked in the state of residence or even a third country, are in any case taxable in the state of residence. This is often overlooked. If you live in a particular country, there is a resident tax liability there. Worldwide income and assets must then be stated in the tax return in that country. Subsequently, on the basis of the 183-day rule, a conclusion is arrived at for which part double taxation deduction can be requested.

Keep track of working days

In the context of the 183-day scheme, it is very important to keep a good record of where you spend each day during the year. A calendar specifying this is an important thing an inspector will request in employment with more than one working country.

Examples of 183 day rule situations

With the 183-day rule, small nuances in situations can already lead to different outcomes whether or not the scheme is applicable. As a rule, you cannot simply apply the following example situations to your situation.

You are considering an employment offer from a Dutch company. Although you will be earning a salary from the Netherlands, you will still continue residing in Portugal and mostly working from there. Your new job would also involve frequent travelling to other countries worldwide. Consequently you expect not to be visiting the Netherlands for work (meetings etc.) for more than 183 days per year. You are wondering if you will need to pay taxes in the Netherlands anyway.

If you are on a Dutch pay roll and due to your domicile you are only taxable for days physically worked in NL. Any other days are taxable in Portugal. You will also need exemption in NL for social security contributions and health insurance as it seems to me these will continue in Portugal. It is possible to correct this afterwards via a tax return. But possibly your future NL employer has an idee how to address this issue. Being on a Dutch pay roll is not strictly necessary however. The NL company can probably run a Portuguese pay roll either through their NL company (if possible under Portuguese rule) or via an own to be established entity in Portugal or a third party pay roll. We would be happy to give you some further advice.

Last year you’ve worked for 9 months in the Netherlands, for a Spanish company. You paid taxes in Spain, but at the end of the year, in December, the Spanish company returned the taxes to you and told you that you had to pay taxes in Netherlands because you had exceeded the 183 day period. You are a Bulgarian national, with permanent residence in Bulgaria, and are working abroad as an electrical supervisor on different projects for your Spanish employer.

In principle, it is correct that tax is due in NL as well as social security contributions if you lived and worked here and if you did not live here but worked more than 183 days. Also important are the following questions: was there no fixed establishment of the employer in NL? Did you have Dutch health insurance? Did you register as living in NL? Have you received any correspondence from the tax office? We will be glad to help.

You are an expat in the Netherlands since 2018 and now started working in Germany for your Dutch employer in January 2021. You are working in Germany for 14 days and 7 days in the Netherlands on a monthly basis. You are paying wages tax and social security and health insurance contributions in the Netherlands and you also receive mortgage interest deduction and childcare allowance here. However, you will be working over 183 days per year in Germany and are concerned about the tax consequences this has for your situation.

If you are physically present in Germany for more than 183 days during a 12-month period, Germany is entitled to levy on the salary earned there. In that case, the Netherlands must grant double taxation deduction. This may affect the mortgage relief refund that you receive. The social security contributions however remain due in the Netherlands because you also work more than 25% of your time in the Netherlands. It is consequently needed to submit both a Dutch and German tax return to make sure taxes are paid correctly. It may also be necessary to apply for an A1 statement to confirm social security contributions are due in The Netherlands.

You lived and worked in NL as an ex-pat. Beginning of this year you started working in Tanzania for a Tanzanian employer. The work schedule is 2 months in Tanzania and 1 month in the NL (plus holidays). You did not deregister from the Netherlands as your house and partner remain in NL. You would like to avoid being taxed on your salary in NL after being taxed already in Tanzania. And therefore if you need to watch out for the 183 days stay in NL to ensure your total stay remains less than that.

If you only work in Tanzania tax consequences should be minimal. If you however work remotely from NL for your Tanzanian employer there will indeed be tax consequences. We will be glad to look into further detail. Is your Dutch health insurance no longer active since your work in Tanzania?

Businesses in the Netherlands are liable to various taxes with each having their own characteristics. The main ones are turnover tax (VAT), Wages Tax, Income Tax and Corporate Income Tax. We can provide business tax advice for entrepeneurs in the Netherlands.

(Corporate) Income Tax

A sole trader or partnership is liable to Income Tax, whereas a limited company is submitted to Corporate Income Tax. Both taxes have their own tax facilities and deduction possibilities.

Our office will complete the annual Dutch corporate tax return in the most advantageous way and we will identify further tax-saving opportunities. Our office is dedicated to reducing the tax burden of your enterprise as much as possible. The corporate tax return will be submitted through our accountants and tax software, which enables us to communicate efficiently with the Tax Office.

VAT

In the Netherlands, apart from the tax returns on the profit made within a business, also turnover tax returns will have to be submitted in order to declare the claimable and payable/due VAT (BTW in Dutch). Also depending on the size of the business, this can be done on monthly, quarterly or yearly basis. For international transactions within the EU, also an ICP form will have to be submitted similarly. Read more about VAT in the Netherlands here.

Wages tax/Payroll

If your business has got employees you will need to set up a payroll administration to make sure the correct amounts for Wages Tax and social security premiums are withheld and paid. The Wages Tax return will have to be submitted monthly. This is also required for the director/owner of a B.V. company, who is regarded as an employee of this business. We can take care of the payroll administration together with the tax requirements and also provide advice for your employment issues.

In your business a lot of international transactions take place and you would like to know how this affects the turnover tax (BTW). You are starting up a business and need tax advice on the available Dutch business structures. Your company based in another country does business in The Netherlands and you want to make sure whether it is liable to any Dutch taxation. You want to employ people from abroad and would like to confirm that they qualify for the 30% ruling. This is where our business tax advice can help you.

In the immensely complex international tax legislation often more questions come up than you care to recount. Whether you have a brief question or an extensive fiscal problem, our experts will provide you with an answer. Best results are obtained if you contact us for tax advice as early as possible when the situation still can be optimized.

For international companies not only Dutch tax law is relevant, but also tax laws in other nations and international tax treaties. This causes complicated situations, but at the same time opens up opportunities for international tax advice and tax planning. In order to avoid double taxation for example it is important that participation exemption applies to the income earned from the foreign subsidiaries.

Do you have a dispute with the Tax Office and do you need professional assistance? J.C. Suurmond & zn. Tax consultants does not hesitate to take over your case and defend your interests by appeal to the Tax Office and if necessary up to the High Court.

Example situations of business tax advice

You are planning to move to the Netherlands from the UK. Your plan is to commence an advisory business with international clients and keep working for your current UK employer in addition. You are looking for some tax/legal advice in relation to your situation.

It is certainly possible to immigrate to NL, commence a business and work for a UK employer in addition. It may be easier to rule out double taxation by invoicing your UK employer from your business and consequently cease to be taxable in the UK. The UK employer may also prefer this rather than having to start running an NL payroll. If you have not lived in NL before you should consider the 30% ruling; it is however important to follow the procedure in the right order.

You and your husband both run a company in France. Your husband issues only one or two invoices a month and you on average 15 per month to customers in the EU. You both have considerable savings. You are considering relocating to the Netherlands. You are looking for a tax consultant who could help you in choosing the best legal structures for your respective companies (also considering your savings), who could help you set them up in the Netherlands, and who could run your daily accounting too.

We would be happy to give you tax advice regarding your possible relocation to NL. Some initial questions would be: where do you live in France and have you lived in NL before? Would you both have EU nationality? If you have worldwide assets setting up a B.V. in The Netherlands could be a good step. since this might qualify you for the 30% ruling

You are new to the Netherlands but have an online business established in the US. You want to know if it is possible to move your company to the Netherlands and what will be the best type of company to register.

It would be interesting to see if the 30% ruling is possible. In that case, it is important if, when, and how long you may have already lived in the Netherlands. Another important question is whether you have already registered with the municipality. We would also need to know whether your US company is a separate entity that can pay out dividends. In that case, are you currently receiving a salary from the company? What level of revenue would the company generate? If we have your answers we are happy to give you specific business tax advice.

If you are thinking of starting a business in The Netherlands many legal and fiscal aspects will have to be taken into account. Decisions taken when starting a business often have long-term consequences – either positively or negatively. International business structures need careful tax planning in order to design the most tax efficient structure. Therefore it is important to acquire professional advice. You can contact us for advice.

Our advisors can advise you on the best way of starting a business in the Netherlands and can support you with:

  • assisting with incorporation and registering with the Chamber of Commerce;
  • submitting the necessary forms to the Tax Office and other authorities;
  • drafting a business plan and organising the accounts;
  • deciding which business type you want to use, for example sole trader, partnership or limited liability company, which each have their own legal characteristics and tax facilities.

Corporate tax rates

The business investment climate is very favourable in The Netherlands. The corporate tax income rate for example is only 20 to 25%. Research & development projects profit from the innovation box, with a corporate tax rate down to 5%. The Netherlands has got one of the largest tax treaty networks, thus avoiding double taxation with many countries. The Dutch participation exemption causes dividends from qualifying shareholdings to be enjoyed tax free and the fiscal unity regime makes it possible to freely offset profits and losses among group members. Maybe yet more important is the beneficial fiscal climate towards international companies.

Corporate tax facilities

The corporate tax facilities together make international business structures very tax efficient. On top of all this there is the 30% tax ruling for expatriates recruited from abroad, which makes 30% of their income tax free along with other advantages.

Correct financials start with keeping good financial accounts. Therefore it is important that your daily financial transactions are processed correctly. Our office can support you with this or take over the complete accounting.

Annual reports

In the annual financial report all the accounting details are assembled. The information from the annual accounts has to be processed in the (corporate) income tax return. The results also give useful accounting information to the management of the business. The figures can be analysed and compared with previous years, in view of making financial decisions for future projections and budgets. For B.V.’s in the Netherlands for example the financial report will also have to be submitted to the Chamber of Commerce for publication.

Interim accounting reports

Apart from the annual accounts, interim figures will help you to have an up to date financial insight in your business. Only with accurate financial information will you be able to take right important decisions. If you only find out your performance after the year, you may be too late to change the  course. With better accounting and financial management you will achieve better results.  We can help you to analyse both opportunities and bottlenecks.

We would like to inform you about the latest tax changes and saving opportunities with this end-of-year newsletter. We hope you will benefit from this newsletter. Please contact our office for more information and personal advice. We have distinguished our tips and hints between private and business. Please go ahead and read what applies to your situation!

With kind regards,

J.C. Suurmond & zn. Tax consultants

Trusted advisors since 1986

Untaxing taxes!

Tax Plan Summary

This is the first budget of the new Rutte IV government, which, as expected, incorporates many of the plans in the coalition agreement. In addition, a number of changes from the ‘Voorjaarsnota’ (Spring Memorandum) have been included in response to budgetary challenges due to, amongst others, the consequences of the war in Ukraine and the Supreme Court decision for box 3.

The box 1 Income Tax is reduced slightly. This is offset by a number of other increases in, for example, the property transfer tax and Box 3 levy for second homes. Corporate income tax for Ltd’s will also be increased, reversing earlier cuts. There has been much talk this year about the box 3 levy following the Supreme Court’s Christmas ruling with significant implications for the way it is levied. You can read more about it below, both about the corrections over previous years and what the situation looks like from now on.

A selection of some tips before the end of this year:

– If you still want to make use of the increased gift exemption of €100,000 for your child’s own home, this is possible until 31-12-2022 at the latest. Under certain conditions it is possible to spread the actual payment over 2022 and 2023.

– The new box 3 levy is based on different asset categories; you could possibly take advantage of this by adjusting the composition of your assets before 31 December. This could include, for example, converting low-yielding investments or loans (receivables) that are currently taxed at the highest rate to low-taxed savings.

– For 2023, the rate of income tax deductions for higher-income earners will again be reduced with 3%; if it is possible to bring deductible expenses forward, the deduction will yield more this year.

Index individuals tax tips:

  • Changes box 1 Tax – Income from work and first-residence property
  • Supreme Court ruling and corrections box 3 levy
  • ‘Mass appeal’  for non-objectors box 3 tax
  • Box 3 calculation – levy on foreign property
  • Changes 2023 Box 3 – Benefit from savings and investments
  • Limitation to shifting between box 3 categories
  • Reduction in the rate of deductible items for higher incomes
  • Limitation of 30% ruling for high wage earners
  • Increasing taxation on second property
  • Last chance for high tax-free gift ‘jubelton’
  • Replacement deduction for training costs
  • Other tax tips

Index business tax tips:

  • Change in corporate tax
  • Change in box 2 tax- income from substantial shareholdings
  • Tax-free allowances employees
  • Tax free scheme
  • Termination of efficiency margin for usual wage
  • Restriction on borrowing from own company
  • Loss relief corporate income
  • Bills to prevent tax avoidance for international companies
  • UBO register temporarily out of public access
  • Other tax tips

Individuals tax tips

Changes Box 1 Tax – Income from work and first-residence property

In 2023, the rate in the first bracket will be reduced from 37,07% to 36,93%. The threshold for the first bracket has also been raised this year, from €  69.398 to € 73.071. The rate for the second bracket remains 49,50%.

Income Tax – AOW not reached2022Income Tax – AOW not reached2023
First bracket up to € 69.39837,07%First bracket up to € 73.07136,93%
Second bracket from € 69.39849,50%Second bracket from € 73.07149,50%

A three-bracket system still applies to taxpayers who have reached the state pension age. Disc 1 goes from 19,17% to 19,03%. The second bracket goes from 37,07% to 36,93% and the third bracket remains 49,50%.

Income Tax – AOW reached2022Income Tax – AOW reached2023
First bracket up to € 35.47219,17%First bracket up to  € 37.14919,03%
Second bracket: € 35.472 – € 69.39837,07%Second bracket:  € 37.149 – € 73.07136,93%
Third bracket from € 69.39849,50%Third bracket from € 73.07149,50%
*other brackets apply to people born before 1 January 1946

For box 2 rates, please refer to the business section of the newsletter.

Supreme Court ruling and corrections box 3 levy

Legal proceedings have been going on for years about the fictitious way of levying tax on the box 3 capital. After all, a fictitious return was assumed that was many times higher than that received on the savings account. The rulings for previous years however all turned out negatively for taxpayers. Ultimately, however, the Supreme Court ruled last December that the fictitious calculation of box 3 for the years 2017 and 2018 can be disproportionately burdensome and therefore in violation of the human rights treaty. According to the Supreme Court, legal redress must be offered to taxpayers who have objected.

The Tax Office has worked out this correction of taxes by taking into account the actual composition of their assets and not the fictitious progressive rates. A fictitious return is still assumed; the return on savings has been sharply reduced to 0,25% or less based on actual interest rates. However, the highest percentage of around 5,5% applies to all other assets. A lower percentage of around 3% applies to debts. The tax-free allowance is calculated at a weighted average rate. In any case, generally this will provide a better connection to the actual wealth situation. Since the fictitious return on other capital is calculated based on the highest percentage, the new calculation is not necessarily more favourable in all situations. However, if this turns out to be less favourable, the existing box 3 calculation will remain in effect. From 2023, only the new system will be applicable.

Below is an overview of the old box 3 tax system in 2022.

‘Mass appeal’ proceedings for non-objectors box 3 tax

It was announced on the 4th November that a supplementary procedure, ‘massaal bezwaar plus’, will be set up for non-objectors. If it follows from this appeal procedure that non-objectors are eligible for legal redress, this restoration will take place in the same way as for objectors. Taxpayers will then no longer have to make an individual request. By doing so, the Tax Office wants to prevent large numbers of appeals being filed again. This mass appeal procedure specifically is for those who did not timely submit an appeal. If you have lodged an appeal, but still do not agree with the outcome for other reasons, we recommend you do submit a request. This may concern, for example, the allocation between partners or the calculation of the levy on foreign property. For the year 2017, this request will have to be submitted before the end of 2022. For more details about this, please contact our office. If you have any questions about this, please contact our office.

Box 3 calculation – levy on foreign property

Incidentally, there are some ambiguities regarding the calculation of the double taxation deduction on foreign real estate. In our view, the deduction was calculated in an unfavourable way, assuming the average rate instead of the high rate applied to real estate. The Tax Office has since started correcting the previous deductions itself. In addition, the choice between the old or the new system is also not unambiguous in situations involving double taxation deductions. We recommend checking these cases extra carefully and raising an appeal if necessary.

Changes 2023 Box 3 – Benefit from savings and investments

From 2023, the new box 3-system will apply. Under this system, the categories of savings, other assets and debt each have their own percentage of notional return. In 2023, the tax-free wealth will be increased to around € 57.000 (€ 114.000 for tax partners). Based on the asset mix, an average return is calculated on the total assets. The rate on the notional return in box 3 will be 31% in 2022. This rate will be gradually increased annually by 1% to 33% in 2024, thus reaching 32% in 2023.

It is planned to introduce a tax system based on actual returns and capital gains by 2026. This follows the Supreme Court’s ruling on the notional return; however, in practice, there are many snags in any system. Consequently, much is still unclear about the new box 3 tax, and it remains to be seen whether it will actually be introduced in 2026.

Limitation to shifting between box 3 categories 

Under the new system of box 3 taxation, savings are taxed more favourably than other assets. To prevent taxpayers from shifting their assets between the different asset categories just around the tax reference date for box 3, a provision has been included in the Box 3 Bridging Act. If a transaction falls within a three-month period around January 1, it is ignored for the purpose of calculating the box 3 tax on 1 January. Therefore, due to this provision, temporarily converting assets does not result in lower taxation. If the conversion, for example from investments to savings, was more than three months ago at the time this conversion is reversed, it does not fall under the reference date arbitrage limitation. If the transaction is not for tax reasons then this also does not fall under the reference date arbitrage; for this, the tax authorities can request documentary evidence to establish this. The first reference date of the new system is 1-1-2023.

Shifting between asset categories around the reference date of 1 January is therefore, in principle, only successful if the shift is maintained for three months. Of course, costs of transferring securities and other assets should also be taken into account. Do you have any questions about this arrangement? If so, please contact us.

Reduction in the rate of deductible items for higher incomes

As already mentioned in 2020 and 2021, the highest rate at which virtually all deductible items are to be deducted is gradually being decreased. It can therefore be advantageous to bring forward deductible costs where possible. Taxpayers whose income falls in the highest bracket in box 1 will gradually have less tax advantage from these deductible items. In 2023, these deductible items may be deducted at a maximum of 36,93%, compared to 40% in 2022.

This concerns the following deductions:

  • Alimony
  • Deduction of study costs
  • Deduction of expenses for specific healthcare costs
  • Deduction of weekend expenses for disabled
  • Gift deduction
  • Mortgage interest deduction
  • Entrepreneurial deduction (self-employer’s deduction, research and development deduction, cooperation deduction, starter’s deduction in the event of incapacity for work, discontinuation deduction)
  • Profit exemption for small and medium sized businesses

Due to this reduction, the deductible items will yield more in 2021 than in 2022 and the following years. If your income falls in the highest tax bracket in 2021, it is therefore advisable, if possible, to pay deductible items such as gifts or healthcare costs before the end of the year.

Limitation of 30% ruling for high wage earners

The 30% rule for incoming employees will be limited to the WNT norm(also known as the Balkenende norm) from 1 January 2024. In 2022, this norm will be €216.000 on an annual basis and in 2023 €223.000. There is a transitional arrangement for incoming employees for whom the 30% rule was applied over the last pay period (December) of 2022. For existing 30%-ruling cases the capping of the 30% rule only applies from 1 January 2026, instead of 1 January 2024. So if you were planning to hire an incoming employee with a salary above the WNT norm early next year, the employee will benefit from an additional two year if the employment starts already as of 1 December 2022. Please contact us for advice on the possibilities.

Increasing taxation on second property

From 1 January 2023 the property transfer tax when buying a second property, will be raised to 10,4%. Until now this rate was 8%. Furthermore from 2023 onwards the correction that was possible based on the rental status of a second property will be limited. Whereas until 2022 the value could be reduced to 45% of the WOZ-value, from 2023 onwards this will be a maximum of 73%. If you would like to know how this will work out in your situation please contact our office.

Last chance for high tax-free gift ‘jubelton’

In 2022 it is your last opportunity to donate the so-called ‘jubelton’ of € 106.671 to your child or anyone other person tax-free. The condition is that the receiver spends this amount on an own home within 3 calendar years and that he or she is between 18 and 40 years old on the date of the gift. From 2023, this exemption will only be €37.231.

The general annual gift exemptions are yet available to be made use of this year. Please note that the money must be credited to the recipient’s account by December 31, 2022 at the latest. There is a general exemption of € 2.274. An exemption of € 5.677 applies to gifts to children. In addition, there are a number of one-off gift exemptions (for example, for a study or the purchase of a primary residence). If you have any questions regarding these exemptions, we will be happy to assist you.

Replacement deduction for study costs

From tax year 2022 onward, study costs are no longer deductible from the income tax. The tax deduction will be replaced by the STAP budget subsidy scheme (Incentive for the Labor Market Position). This budget will apply to people with a link to the Dutch labour market. From 1 March 2022, workers and job seekers can apply for a STAP budget at the UWV. This is possible per person once a year. The budget is €1.000 per person per year. If the application is approved, the amount is paid to the trainer. Only study costs paid until 2021 can still be deducted in the Income tax returns.

Other tax tips

  • Do you expect to pay tax for the 2022 or 2023 tax year? Requesting a provisional assessment in good time, will save you legal interest. Interest is calculated if the assessment is imposed later than 6 months after the end of the calendar year (1 July 2023). The tax interest is at least 4%. To ensure that the assessment is imposed in time, we recommend that you apply for it before 1 April 2023. The assessment for the 2022 tax year must be paid at once. There is the possibility of paying the assessment for the tax year 2023 in instalments. Do you have questions about this? We are happy to assist you in applying for a provisional assessment.
  • If you expect to receive a refund for 2017, an Income Tax return for this year must be submitted before December 31, 2022. In 2023, the 5-year term for submitting this declaration will expire.
  • If possible, bundle deductible expenses such as medical expenses and donations in one specific year. For example, a deduction is achieved earlier and the threshold is only deducted once from the expenses. For donations, the threshold disappears completely if you commit the donation to a charitable institution for 5 years.
  • The income-related combination discount can be applied to people with children under the age of 12. The conditions are that both partners work. The income-dependent combination discount will be increased to € 2.694 in 2023. From the 1st January 2025, the income-related combination discount will be abolished. Children born before this date will still be entitled to this tax credit for 12 years. However, there is still talk of a transitional arrangement, the outcome of which is not known at the moment.

Business tax tips

Change in corporate tax

The corporate tax rate will be increased this year. Apart from that, the tax brackets are also modified. The corporate tax rate was 15% on the first €395.000 profit and 25,8% for profits above € 395.000 this was 25% in 2021. In 2023, the rate will be 19% on the first € 200.000. The rate for profits above € 200.000 remains 25,8%.

Corporate tax 20222022
First bracket up to € 395.00015%
Second bracket from € 395.00025,8%
Corporate tax 20232023
First bracket up to € 200.00019%
Second bracket from € 200.00025,8%

Changes in box 2 tax – Income from substantial shareholdings

The box 2 rate remains unchanged at 26,9% for 2023. A two bracket tax rate will be introduced in box 2 from 2024. This concerns income from substantial shareholdings, such as dividends and capital gains on shareholdings above 5%. The rate in 2024 will be 24,5% for the first €67.000 and 31% for the amount above that. Since this applies per partner, a total of € 134.000 can be taxed at the low rate in case of tax partnership.

Income tax box 22022 and 2023Income tax box 22024
Flat rate26,9%First bracket op to € 67,00024,5%%
Second bracket fron € 67,00031%

Tax-free allowances employees 

Because many people have been working from home since the corona crisis (and this indirectly costs the employee money; more energy consumption, coffee consumption, etc.), the cabinet has decided to introduce a tax-free working from home allowance. As a result, employers can reimburse a maximum of € 2 per day or part of a day worked. The tax-free travel allowance of € 0,19 per km will continue to exist and will be raised to € 0,21. The allowances cannot be paid at the same time; per day you can either opt for payment of the work from home allowance, or payment of the travel allowance.

An employer can provide a tax-free allowance for setting up a home workplace. The employer can reimburse the costs for, for example, an office chair or computer screen via other specific exemptions from the work-related costs scheme.

Tax free scheme

We would like to make you aware of the possibility under the Dutch Wages Tax Act to make a payment on a tax free basis for certain reimbursements which normally would be regarded as taxable income. This year this tax free scheme (‘vrije ruimte’) is maximised at 1,7% of the total company wages up to € 400.000,– and 1,18% beyond that. If you have not paid any other reimbursements or benefit in kind to employees including directors which could be regarded as taxable wage, you could still make use of this scheme by paying out a tax free bonus. An amount up to maximally € 2.400 would be seen as common. A temporary widening to 3% over the first €400.000 of the wage bill applies for 2023. This is reduced again from 2024 to 1,92% of the wage bill up to € 400.000.

Termination of efficiency margin for usual wage

Director-major shareholders (>5% shareholding in a BV) are subject to the customary wage scheme. In 2022, the salary could in principle be set 25% lower than what was customary for employees in employment with a third party, also known as the efficiency margin(doelmatigheidsmarge). From 2023, the efficiency margin will be abolished and the salary must therefore be at least equal to that of someone with the most comparable employment. This could therefore result in a salary increase and additional payroll tax to be paid by director-major shareholders before 2023.

Restriction on borrowing from own company

The possibility to borrow from one’s own BV will be restricted as of 2023, in connection with the entry into force of the Excessive Borrowing from Own Company Act(wet excessief lenen). If a shareholder borrows more than € 700.000 from his or her own BV, the excess will be taxed in box 2 (once). The first tax reference point is 31 December 2023. First home equity debts do not count towards the € 700.000 limit if they are covered by a notarial mortgage deed (a mortgage deed is not required for home equity debts existing as of 31 December 2022). In the case of high loans or overdrafts, it is important to anticipate this and start repayments in advance, or reserve money for the tax settlement. Specific rules also apply in partner situations. Is your debt to the BV higher than € 700.000 or were you planning for this? Contact our office to discuss the possibilities and consequences.

Loss relief corporate income 

Currently, companies can offset losses against profits from the precious year or the six consecutive years. No maximum amount applies. From 2022, up to €1.000.000 of the profit can be offset against losses. Only 50% of the profit that exceeds €1.000.000 be set off against tax losses. In addition, the time limit of 6 years will be cancelled; losses can be settled indefinitely. Unfortunately, the restriction applies to all Dutch companies, regardless of whether these losses originate from abroad. For small companies, the longer term for loss set-off may actually be an advantage.

Bill to prevent tax avoidance for international companies

In addition to the aforementioned bills on the Tax Plan, the following two bills have been submitted to the House of Representatives to tackle mismatches and tax avoidance in international structures:

– Bill on ‘Combating mismatches in the use of the arm’s length principle’: adjustment of the rules of arm’s length transfer pricing between international groups in order to prevent tax mismatches. In short, this bill means that a reduction of taxable profit is only permitted if this is deducted by an increase in the foreign tax base;

– Bill ‘Implementation tax liability measure from the second EU anti-tax avoidance directive’: the tax liability for reverse hybrid entities. In short, this proposal means that under certain circumstances the country of residence follows the qualification of the country where the participants or shareholders are established.

UBO register temporarily out of public access

The EU Court of Justice recently ruled that that the provision in the European Anti-Money Laundering Directive, which requires Member States to ensure that any member of the general public must have access to UBO information, is insufficiently substantiated and therefore invalid. Making the information of UBOs publicly accessible constitutes a serious interference with the right to privacy, according to the Court. As a result, the obligation that the UBO register be accessible to everyone is in question. In response, the government has decided that pending further decision-making, the Chamber of Commerce will temporarily stop providing information from the UBO register.

The above does not affect the duty for legal entities to register UBOs. Since 27 September 2020, it is mandatory for (many) entrepreneurs to register a UBO in the UBO register. UBO stands for Ultimate Beneficial Owner. These are individuals who own more than 25% of the shares or hold the economic interest or have effective control of the company.

Other tax tips 

  • Do you expect to pay tax for the tax year 2023? If you request a provisional assessment in good time, this will save you tax interest. The tax rate for income tax entrepreneurs is currently 8%.
  • Did you find out that you forgot to include some items in your VAT return? Then submit a supplement declaration. You can do this for this year or for the past 5 years. If it concerns VAT to be received or remitted of € 1.000 or less, this is allowed to be included in the next VAT return. You do not need to submit a separate supplementary declaration for this.
  • Do you drive a company car and do you use this car privately? In that case, a correction must be made for private use in the last VAT return (to be submitted in January 2022). This may be based on actual use or on the basis of a fixed rate. Do you have questions about this? We are happy to help you.
  • If you have made sufficient investments to qualify for the small-scale investment deduction, but have not yet paid all investments, we advise you to make these payments before the end of the year so that you are eligible for the small-scale investment deduction. You are eligible for the small-scale investment deduction when the total investment is higher than € 2.400.–.
  • Has your partner worked in your business this year but has not received compensation yet? Then consider paying compensation before the end of the year. This is deductible in your business. For your partner, this reimbursement is taxable in box 1. The rate depends on your partner’s total Box 1 income and is especially advangtageous if your partner has a low income.
  • From 1 January 2025, the BPM exemption for company vans will be abolished. However, the exemption will continue to apply to vans purchased before that date. So if you were planning to purchase a van for your business anyway, it will be advantageous if this takes place before 1 January 2025. However, the BPM exemption will continue to apply to emission-free vans.
  • Additional measures have been announced regarding repayment of corona tax debts. We ask you to contact us for further clarification.

Among the various organisations we support, our financial support to the RRT Rapid Relief Team is the most current. RRT provides hope and support to people over the whole world – especially in the hour of need, such as the current war in Ukraine.

J.C. Suurmond & zn. Taxconsultants are happy to contribute to Operation 322, which RRT launced, to provide the homeless with care products and emergency food kits. RRT is currently loading trucks with food boxes and care kits for the Ukrainians. Volunteers throughout the whole of Europe are getting together to give aid to the refugees.

We are delighted to help the RRT Rapid Relief Team in making a difference!

Read more about RRT and Operation 322 here.

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