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Dutch Parliament Approves Tax Plan for 2023 Including Increased Lower Corporate Tax Rate — Orbitax Tax News & Alerts

The Dutch Ministry of Finance has published an overview of the main tax changes for 2023 following the approval of the 2023 Tax Plan in the Senate (upper house of parliament) on 20 December 2022. The main changes are summarized as follows:

  • An increase in the lower corporate tax rate from 15% to 19% from 1 January 2023, along with a reduction in the lower/upper rate threshold from EUR 395,000 to EUR 200,000 (upper rate maintained at 25.8%);
  • The abolishment of the payment discount for provisional corporate income tax assessments, which was granted if the provisional corporate income tax assessment was paid in one go before the first payment term expired;
  • A reduction in the basic rate of individual income tax from 37.07% to 36.93% on income up to EUR 73,031 in 2023, with the top rate maintained at 49.50% (rates apply for individuals subject to state social security contributions);
  • An increase in the tax rate on individual Box 3 income (taxable income from savings and invested assets) by 1% per year from 31% to 32% in 2023, 33% in 2024, and 34% in 2025, along with an increase in the tax-free allowance from EUR 50,650 to EUR 57,000 (doubled for partners);
  • The introduction of a temporary system with a new calculation method to match actual returns more closely for Box 3 income for different asset categories, which includes the division of assets into three categories with different rates of return for each: bank balances, other assets/investments, and debts (to apply from 2023 to 2025, with a new system to be introduced from 2026 based on actual returns);
  • An increase in the standard property (real estate) transfer tax rate from 8% to 10.4% from 2023, instead of the previously agreed increase to 9% (or 10.1% as also considered);
  • An increase in the gaming tax rate from 29.0% to 29.5%;
  • A VAT zero-rate for the supply and installation of solar panels on or in the immediate vicinity of homes, with the application of the zero-rate for public and other buildings used for activities of general interest to be considered at a later date;
  • The implementation of Council Directive (EU) 2021/514 with regard to the exchange of information on income generated by sellers through digital platforms (DAC7), which, among other things, creates an obligation for digital platform operators to report the income earned by sellers on their platforms and for EU Member States to automatically exchange this information.

Further to the main tax changes covered by the Ministry of Finance, the Senate also approved legislation for the introduction of a temporary solidarity contribution on excess profits in the energy sector in 2022. As previously reported, the solidarity contribution applies to companies generating at least 75% of their turnover from economic activities in the fields of extraction, mining, refining of petroleum, or manufacture of coke oven products. The solidarity contribution amounts to 33% of the surplus profit of such companies in the contribution year, which is any financial year commencing in the calendar year 2022. For this purpose, the surplus profit is the amount of taxable profit in the contribution year exceeding 120% of the reference profit, which is the average taxable profit in the four financial years preceding the contribution year (2018 to 2021).

The legislation for the tax plan measures and the solidarity contribution must now be published in the Official Gazette to enter into force. Further details will be published once available.