November 12th, 2013
Every year the Dutch government announces their Tax Plan for the upcoming year. This plan includes the changes in taxation laws for the fiscal year 2014. Below are the major changes the plan contains.
Tax plan changes in tax rates and brackets in 2014
As the government announced earlier, the tax rates and social security premiums will not be corrected for inflation.
The tax rate of the first bracket will be lowered by 0.75 per cent, the fourth tax bracket of 52 per cent will start at € 56,531 (2013: €55,991)
For senior citizens (65 and older of age) different tax rates apply. The second and third tax bracket will respectively run till € 33,363 and € 55,531.
The tax rate for Box 2 (dividends and capital gains from substantial shareholding) will be lowered to 22% (2013: 25%).
Adjustments of tax credits
The general tax credit and the employment tax credit will be adjusted, all other tax credits will remain the same.
The general tax credit will be increased from € 2,001 to € 2,100. The employment tax credit will be increased from € 1,723 to € 2,097. This credit however will in the future be “ degressive”. Furthermore, it will be lowered for high incomes to nil in 2017.
Changes to interest on tax due
Interest rates on tax due will be adjusted. All taxes except corporate income tax will have a lower interest rate of 4 per cent. Interest due on corporate income tax will be increased to a minimum of 8 per cent.
These adjustments will come into effect as of the 1st of January 2014. However, the government intends to implement a transitional arrangement that de facto will be effective as of 1st of April 2014.
Dutch tax law exempts lump sums paid due to the termination of an employment contract if the lump sum is deposited to obtain a standing right. From January 1, 2014 this exemption will no longer be applicable.
The government has implemented a temporary measure for standing rights already existing on 15 November 2013: to trigger a cash flow in 2014: if the standing right is paid out at once instead of in instalments, the payment will be without revisionary interest and will be taxed in Box 1 at only 80 per cent of the value of the lump sum.
Changes in gift tax
As of the first of October 2013, an amount of € 100.000 may be donated tax-free under the condition that this amount will be used by the beneficiary to acquire a main residence or to pay off a home owner’s loan. This measure will be extended until January 1, 2015.
Filing intentionally incorrect provisional tax return
The plan announces that taxpayers which intentionally file an incorrect provisional tax return will be fined severely.
Opting for non-resident taxpayer
A new ruling will apply to non-residents who earn almost (90 per cent) of their worldwide income in the Netherlands; they can opt to be treated as domestic taxpayers.