The cabinet presented the 2021 Tax Plan on Tuesday. Read here what will change:
In order to retrain people who lose their job as easily as possible in this crisis, employers no longer pay wage tax for training costs incurred after the employment contract ends.
Reduction of corporate income tax
The previously announced lowering of the high corporate tax rate is canceled, so that this rate remains at 25%.
Job-related investment discount
The cabinet is encouraging companies to make investments with a new investment discount from 2021, the job-related investment discount (BIK). When companies make an investment, such as the purchase of a new machine, they receive a discount that they can deduct from the payroll tax. Details of the scheme are being further elaborated.
The lowering of the low corporate tax rate from 16.5% to 15% will continue. In addition, more SMEs will pay this lower rate in the coming years. From 2021, the low rate will apply to winnings up to € 245,000 instead of € 200,000. In 2022, this limit will be further increased to € 395,000.
From 2021, homebuyers aged 18 to 35 will no longer pay transfer tax. Investors are going to pay more: from 6% to 8%.
Savers and small investors with assets up to € 50,000 (or € 100,000 with a tax partner) will no longer pay tax on those assets from 2021. The rate of the tax will increase slightly from 30% to 31%. As a result, the number of small savers and investors paying box 3 tax will fall by almost 1 million people. And it means that everyone with savings or invested capital up to € 220,000 (or € 440,000 with a tax partner) will pay less tax on it.
Employed person’s tax credit
The increase in the employed person’s tax credit from 2022 will be moved forward one year. This increase is in addition to an increase previously planned for 2021. The general tax credit will also be increased by an additional € 22, on top of the € 60 that was already planned. In 2021, the basic income tax rate will decrease from 37.35% to 37.10%. The government will lower this rate further between 2022 and 2024, to 37.03% eventually. Finally, the elderly person’s tax credit will also be increased.
The self-employed person’s allowance will be further reduced. The cabinet will compensate for this, so that most self-employed people will still benefit from it next year (employed person’s tax credit and changes in income tax). The cabinet is phasing out the self-employed person’s allowance more quickly and more strongly, on top of the steps already started last year. The deduction will be reduced annually from next year; until it comes to € 3,240 in 2036. This was originally € 5,000 in 2028.
Offsetting losses at companies will be limited by 2021; this structurally yields € 555 million.
Informal capital structures
Informal capital structures will be tackled by 2022, which is expected to generate a structural return of € 173 million.
Liabilities and equity
The tax treatment of loan and equity capital is also being investigated more equally. Borrowing (borrowed capital) is now tax-advantaged. The cabinet is investigating whether this can be effectively tackled with a capital allowance, including the tightening of a generic interest deduction restriction (earnings stripping measure).
Liquidation and discontinuation loss scheme
In addition to the 2021 Tax Plan, the bill on the liquidation and discontinuation loss scheme was also sent to the Lower House on Budget Day. As of 2021, this will end the unlimited deduction of certain losses in the Netherlands when business activities abroad are discontinued.
It has been agreed in the Climate Agreement that industrial companies will be encouraged to invest to reduce CO2 to emit. If companies still have too much CO2 emit a CO2-pay levy. The more efficiently a company produces, the less tax it has to pay. Only the companies that have the agreed reduction in CO2 not realize, risk a levy in 2030 of € 125 per ton of excess CO emitted2, according to current insights. The rate is recalibrated with new insights, after recalculation by PBL. In the CO2levy takes into account the consequences of the corona crisis for the industry. Industry as a whole is expected to pay for emissions for the first time in 2024, unless they take adequate reduction measures. Companies that do not produce sufficiently efficiently are already paying for their emissions.
Vehicle taxes are being adapted to stricter environmental requirements. The electricity at charging points for electric cars will remain relatively cheap up to and including 2022. It will be more attractive for ships to use more environmentally friendly shore power (instead of own generators) by lowering the tariff for shore power.
The cabinet is working on improvements in the benefits system. The Tax Plan contains proposals to achieve this. The proposals regulate that the position of people with an allowance in relation to the Tax and Customs Administration / Benefits will improve. The Tax and Customs Administration / Benefits will soon be able to offer better customization to people who have to repay excess benefits received. And the personal situation is taken more into account. For example, people can receive more childcare allowance if their spouse is admitted to a nursing home. In the future, further measures will be taken to prevent parents from getting in trouble because of the benefits system.
Source: central government