Tax plans for 2023 – what do we already know?
1. Lower corporation tax rate to apply up to maximum of € 200,000
From 2023 companies and other legal entities whose profits exceed € 200,000 will pay significantly more corporation tax. This is because the lower rate of corporation tax of 15% will apply to the first € 200,000 of their profits instead of the first € 395,000 at present.
2. Allocation to tax-deferred retirement reserve (FOR) removed
Entrepreneurs whose profits are subject to income tax may have to pay more tax. This is because the option of allocating a portion of their profits to the retirement reserve is being removed. However, they will not need to immediately settle the tax payable on a retirement reserve already built up.
3. Savings variant in box 3
For 2023 and 2024 the government plans to tax assets in box 3 via the so-called savings variant. This is in response to a Supreme Court judgment in which the current levy was deemed to be in breach of the law. The savings variant takes the actual level of savings, debts and other assets as a basis. These will still be taxed at a flat rate.
4. Electric car
The addition to taxable income for an electric car that is first registered or first enters use in 2023 is increasing for cars with a list price of more than € 30,000. The lower addition of 16% will also apply next year, but only on the first € 30,000 of the list price instead of the first € 35,000 at present. The addition will remain at 22% above this level.
5. Kilometre allowance increased
The tax-free kilometre allowance of € 0.19 per kilometre is being increased. It is not yet known what level of increase the government has in mind.
6. Higher transfer tax for companies and investors
The transfer tax for non-residential properties and properties that cannot be regarded as the buyer’s own home is increasing from 8% to 10.1%. On balance, this means that companies and investors, but also persons who buy or let a holiday home, will pay over 26% more transfer tax.
7. Self-employed person’s allowance reduced
The self-employed person’s allowance is being reduced further from € 6,310 this year to € 5,950 in 2023. In addition, it will only be possible to offset the allowance at a maximum rate of 37.07% instead of 40% at present.
8. Average income scheme abolished
The average income scheme, under which an average of the past three years is taken as a basis for an income tax assessment, is being abolished. This will be particularly disadvantageous for people with variable incomes of more than € 69,398. According to the coalition agreement, the last possible averaging period will be 2022-2024.
9. Vacant value ratio for let properties increased
The vacant value ratio, a rent-dependent factor used to calculate the value of a fully or partially let property, is being increased significantly. As a result, the value of a let property in box 3 will go up, meaning that the landlord will have to pay more tax in box 3.
10. VAT rate of 0% for solar panels
The VAT rate applicable to the purchase and installation of solar panels on or in the immediate vicinity of homes is being reduced to 0%. This does not necessarily mean a new tax advantage for the consumer, as private individuals can already claim back the VAT now. The administrative burden will, however, be reduced as a result of this measure.
Please note: most of these measures still have to be approved by Parliament and have not yet been decided on definitively. The increase in the addition to taxable income for electric cars and the reduction in the self-employed person’s allowance have, however, already been adopted.
If you have any questions about any of these changes, please contact us. We will be happy to advise you.