NL Tax Alert: Budget Day proposals

Today is budget day in NL with several tax proposals published. Some highlights:

General measures:
– The headline CIT rate remains unchanged at 25.8%. Per 2023, the step-up rate will be increased to 19% (current rate: 15%) and will be applicable to the first EUR 200k of taxable profits (currently: EUR 395k).

Measures relevant for real estate industry:
– The general real estate transfer tax rate increases to 10.4% (current rate: 8%). The rate for residential property for own use remains unchanged at 2% (if no exemption applies).
– The government announces that fiscal investment institutions can no longer directly invest in real estate assets as from 2024.

Measures for the environment and energy transition:
– The budget for investment deductions MIA and EIA is increased (environmental and energy investments).
– The VAT rate on solar panels for residential property will be reduced to 0%.

Measures relevant for employers/employees:
– Per 2024, the 30% rule for expats (effectively exempting 30% of expat wages) will be capped for high salary earners. The maximum eligible wage will be equal to the maximum government wage (2022: EUR 216k). A transitional rule applies until 2026.
– Travel costs may be reimbursed tax free up to EUR 0.21/km per 2023 and EUR 0.22/km per 2024 (currently: EUR 0.19/km).

Measures relevant for founders/majority shareholders (individuals):
– The Box 2 rate for substantial investments will be differentiated per 2024: for income up to EUR 67k the rate will be 24.5% and an excess will be taxed at a rate of 31%.
– The customary salary for a substantial shareholder will increase in some cases as the “efficiency margin” of 75% of the most comparable salary is abolished.
– The exception for the customary salary rule for innovative start-ups is abolished.

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