The Dutch government has announced several changes to the tax rules for entrepreneurs that will take effect in 2023 and some in 2024. These changes include an increase in corporate tax and a decrease in personal income tax. Find out more in the article below and contact us if you have any questions!
Changes in corporate income tax rate
All profit generated by your BV is taxed with corporate tax. As most other European countries, the corporate tax rate race-to-the-bottom seems to have turned and rates are now moving up across Europe.
The SME rate will be increased from 15 to 19 percent. Furthermore, the bracket limit will go down from €395,000 to €200,000. Profits up to €200,000 will be taxed at 19 percent. Any profit that exceeds €200,000 will be taxed at 25,8 percent.
The current corporate tax rates and thresholds are as follows:
|SME tariff||15% (up to €395.000)||19% (up to €200.000)|
|Standard tariff||25,8% (profits exceeding €395.000)||25,8% (profits exceeding €200.000)|
|Innovation Box||9% on profits derived from qualifying innovative activities||9% on profits derived from qualifying innovative activities|
Tax changes on dividend to a personal shareholder
This is also called the “Box 2 ” rate and will remain the same in 2023.
If you are a shareholder in a BV and you own at least 5% of the shares, then you are a substantial interest holder for box 2 in income tax. Income that falls into box 2 are dividend payments or sales profits on the sale of shares. The tax rate in box 2 is 26.9%. This is the same as in 2022.
Box 2 will have two tax brackets from 2024. From then on, you will pay 24.5% on the first €67,000 and 31% on everything above that.
|Box 2: Substantial Interest||2022||2023||2024|
|Up to €67.000||26,9 %||26,9 %||24,5 %|
|Over €67.000||26,9 %||26,9 %||31 %|
Personal income tax for shareholder in Dutch BV
There will also be changes in personal income tax (“Box 1 “). The is all income from employment, benefits and home ownership. In most cases, entrepreneurs with a BV who pay their personal income tax in the Netherlands pay this tax on any salary they take out from the company.
Your income in box 1 is taxed in two brackets. In 2023, you will pay 36.93% tax on your income up to €73,031. Compared to 2022, you will pay the low rate on a larger part of your income. And that low rate is also lower than in 2022, when it was 37.10%. On the excess, you will pay 49.5% income tax next year. In box 1, you deduct the mortgage interest paid for your own home. In 2023, the deduction is limited to the basic rate of 36.93%.
|Personal Income Tax (IB)||2022||2023|
|Bracket 1||37,10% up to €68.508||36,93% up to €73.031|
|Bracket 2||49,50% from €68.508||49,50% from €73.031|
Example personal income tax 2022 vs. 2023
When calculating the total personal tax burden, you should take into account several deductions and healthcare contributions. The example below shows an overview of the personal income tax burden on an individual with a €48.000 per year gross income in 2022 and 2023.
|Gross annual income||48.000||48.000|
|Personal income tax||- 17.793||- 17.726|
|Health insurance contributions||- 2640||- 2.606|
|General tax credit||+ 1.286||+ 1.526|
|Labour discount||+ 3.595||+ 4.377|
|Tax burden (incl. healthcare)||32,4%||30,1%|
General tax credit
Everyone living in the Netherlands is entitled to this tax credit. The amount of your general tax credit depends on your income in box 1. From 2025, your income in box 2 and box 3 will also count. As your income increases, the general tax credit decreases.
In 2023, the maximum general tax credit is EUR 3,070. You get this at an income of 22,660 euro. If you earn more, the discount decreases. At an income of 73,031 euro, you will no longer get a general tax credit. With this, the tax credit is higher than in 2022 and continues up to a higher income.
This discount applies to anyone with income from employment. The maximum labour discount increases by 792 euros to 5,052 euros in 2023. You receive this labour discount when you have an income of 37,626 euro. The labour discount decreases by 6.51% of the additional income.
Limitation of excessive borrowing from own BV
If you are a substantial shareholder and director in a BV (you own more than 5%) in the Netherlands you will no longer be allowed to borrow unlimited amounts from your own company.
If you borrow over €700,000 euros, the part above 700,000 euros is qualified as a dividend distribution. On this you pay 26.9% income tax in box 2 (see above)
If you use excess cash in your holding company for private investments, then too the limit of 700,000 euros applies.
An exception applies to owner-occupied home debts incurred for the purchase, maintenance or improvement of the owner-occupied home.