Netherlands’ 2024 Tax Changes – Key Takeaways for SMEs

As 2024 unfolds, SMEs in the Netherlands face a new tax landscape, shaped by the ambitions of Rutte IV and a proactive parliament. This article summarises the crucial tax changes impacting SMEs, ensuring businesses are well-informed and prepared.

Key Tax Changes in 2024

Income Tax Adjustments:

• Higher incomes enter the top tax bracket (49.5%) sooner, starting from €75,518.
• Slight increase in the first tax bracket, offset by raised labor and general tax credits.

Box 3 Wealth Tax Revisions:

• Continued debate and adjustments post-Supreme Court ruling.
• Changes in calculating taxes on savings and investments.
• Increased tax rate in Box 3 from 32% to 36%. This is levied over the (fictional) gains.

Tax Benefits and Deductions for SMEs:

• Self-employed and small business owners with lower incomes pay less tax.
• Reduction in self-employed deduction and small business profit exemption.

Corporate Tax Reforms:

• Introduction of minimum profit tax for large corporations.
• Adjustments for directors-major shareholders (DGA) in Box 2. For profit distributions up to €67,000, significant shareholders will pay a tax of 24.5%. Dividends exceeding this amount will be taxed at 33%. Furthermore, the amount that directors-major shareholders can borrow tax-free from their own private limited company (BV) is reduced from seven hundred thousand to five hundred thousand euros. However, loans for personal housing are excluded from this change.

Consumer Taxes:

• Increased taxes on tobacco and alcoholic beverages.
• Adjusted taxes on energy, with incentives for green energy transition.

Excise Duty Changes:

• Rise in excise duties on special beer and tobacco.

Real Estate and Transportation:

• End of tax-free gifts for home purchases.
• Increased untaxed travel allowance.

Implications for SMEs

Financial Planning:

• SMEs must adjust their financial strategies to accommodate higher taxes in certain areas.
• Opportunities exist in the form of increased tax credits and benefits for lower incomes.

Investment and Savings:

• Changes in box 3 tax calculations necessitate a review of investment strategies.
• Increased tax on savings and investments for amounts above the tax-free threshold.

Business Operations:

• Revised corporate tax laws and deductions impact profitability and cash flow.
• SMEs need to be aware of the new limits on deductions and adjustments in Box 2 for DGAs.

Consumer Behavior Influences:

• Tax increases on tobacco and alcohol, along with energy tax adjustments, may influence consumer spending patterns.
• SMEs should consider these factors in their marketing and pricing strategies.

Conclusion

The tax changes in 2024 present both challenges and opportunities for SMEs in the Netherlands. Staying informed and adjusting business strategies accordingly will be key to navigating this new fiscal environment successfully.

Read more information about starting a business in Holland in our country guide.

Our guide on tax and incentives gives you a brief overview of what SME’s can take advantage of when doing business in the Netherlands.

Get in touch to discuss what this means for your business