Dutch tax rules
The Dutch tax rules change every year. In 2023, a lot has happened fiscally-wise. One of the most discussed topics is the major modification in wealth taxation (box 3). In addition, the mortgage interest deduction is slightly lower. In 2024, you can file your tax return for 2023. On this page, we clarify the Dutch tax rules for 2023 and 2024.
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We are happy to help you with your income tax return for 2023. You can file your income tax return from the 1st of March, 2024.
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Tax on income from work & home ownership (Box 1)
There has been a two-rate system for income tax for several years. In 2023, the basic rate will be 36.93% and the top rate will be 49.50% forincome above 73.031,-.As of January 1, 2024, the basic rate will increase slightly to 36.97% and the top rate of 49.50% will remain unchangedfor income above €75.518.
Tax rate 2023 – 2024
In 2023, the tax on income from work has been reduced compared to 2022. As a result, you pay less income tax on your monthly payslip. You can see the modification in the table below.
| Tax bracket 1 | Tax bracket 2 | |
|---|---|---|
| 2023 | 36.93% ( €0,- up to €73.031) | 49.50% ( €0,- up to €73.031) |
| 2024 | 36.97% ( €0,- up to €75.624) | 49.50% ( €0,- up to €73.031) |
Wealth tax Netherlands 2023 – 2024 (Box 3)
Previously, the tax authorities calculated a fictitious return of 4%, on which a tax of 30% was charged. This therefore amounted to a levy of (30% x 4%) 1.2% tax. As you might understand, this is not entirely fair to small savers. Now the percentages change every year.
What will not change is that a fictitious return is still calculated on your assets, in which it does not matter how much return you have actually achieved.
What has changed with the box 3 levy is that since 2022 there are three brackets, based on your assets that are ABOVE the exemption of € 57,000 in 2023, each with its own ‘asset mix’. A distinction is made between bank and savings deposits, investments and other assets and liabilities.
| 2022 | 2023 | 2024 | |
|---|---|---|---|
| Savings | 0.01% | 0.92% | tba |
| Investmenst/other assets | 5.53% | 6.17% | tba |
| Debts | 2.46% | 2.47% | tba |
Calculation box 3 in 2023 (without tax partner)
We take an example of €150,000 in savings, €150,000 in investments, and a study debt of €50,000.
Step 1: calculate the return per wealth part
Savings: € 150,000 x 0,92% = € 1.380
Investments: € 150,000 x 6.17% = €9.255
Debts (minus threshold € 3,400): € 46,600 x 2,46% = € 1,147
Taxable return: €1.380 + € 9.255 -1.147 = €9.488
Step 2: calculate total assets
€ 150,000 + € 150,000 – € 46,600 = € 253.400
Step 3: calculate the rate of return
€ 9488 / € 253.400x 100 = 3.74%
Step 4: calculate the basis for savings and investments (assets – tax free allowance)
€253.400 – € 57.000 = € 196.400
Step 5: calculate income from savings and investments
€ 196.400 x 3.74% = € 7.345
Tax (32% in 2022) = € 2.350
Tax tips for the fiscal year 2024
Although you will only do your income tax return for 2024 in 2025, you an already arrange some tax matters in 2024.
1 Apply for a provisional assessment
If you already know that you have to pay an amount? Or that you will receive an amount, for example, because you bought a home or made other deductible costs. In this case, you can apply for a provisional assessment so you pay or receive the amount in monthly installments.
2 Arrange your tax partnership
In the Dutch tax system, tax partners get the opportunity to choose who declares which deduction or capital and in which proportion they do so. This can lead to fiscal advantages for tax partners. However, only living together with someone does not automatically imply a tax partnership. Do you not meet the conditions? You can still make a cohabitation agreement before the 31st of December, 2024 to be seen as tax partners.
3 Get a tax advisor
A tax advisor can help you with different fiscal issues. We can help you with your tax return, provisional tax return, or other tax-related questions. The TaxSavers is happy to help you. Leave your details in our contact form or call us at +31 (0)20 – 2170120 for an informal conversation.
Dutch tax rules 2021
Tax-free capital
The biggest change in the Dutch tax system of 2021 is a significant increase in tax-free capital. In 2021, the tax-free capital increased from €30,846 to €50,000 if you do not have a fiscal partner. If you do have a fiscal partner, the tax-free capital increased from €61,692 in 2020 to €100,000 in 2021. From now on, only your capital in excess of €50,000 (or €100,000 if you have a fiscal partner) will be taxed. This saves a significant amount of money for a lot of people.
Tax rate
In 2021, there were no significant changes to the tax brackets and tax rates. However, there is a slight decrease in the tax rate of the first tax bracket. You can see the change in the table mentioned below.
| UNTIL €68,508 | FROM €68,508 | |
|---|---|---|
| 2020 | 37.35% | 49.50% |
| 2021 | 37.10% | 49.50% |
Example
In this example, we show you the effect of the decreased tax rate. We assume a yearly gross salary of €45,000,-. We will compare the difference in income tax between 2020 and 2021.
2020: A yearly income of € 45,000 did have a tax rate of 37.35%. This shows that €16,807 income tax must be paid in 2020.
2021: A yearly income of € 45,000 has a tax rate of 37.10%. This shows that €16,695 income tax must be paid in 2021.
Due to the change in our tax system, you have to pay €112 less income tax in 2021 in this example.
Allowances
The government will work on a better benefits system in 2021. Their objective is to achieve a system that is fairer and which has a more human approach.
Goals:
- Improve the legal protection
- More human approach
- Change the definition of partnership
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We are happy to help you with all your tax-related questions. We are looking forward to helping you with your income tax return, provisional tax assessment and/or other tax-related topics. Please, contact us using the details mentioned below.
