Tax plan 2021
The Tax Plan 2021 package contains additional measures to stimulate economic growth in this corona crisis. At the same time, the cabinet also offers perspective for the period after that. The government will continue with reforms, with measures for a better, fairer and greener tax system.
This is stated in the Tax Plan 2021 package, which State Secretary Vijlbrief of Finance presented to the House of Representatives on 15 September 2020.
The 2021 Tax Plan includes the following measures:
Measures related to Corona
People who lose their jobs in this crisis must be able to retrain as easily as possible. That is why employers no longer pay wage tax and national insurance contributions for training costs incurred after termination of employment.
The previously announced lowering of the high corporate tax rate is canceled, leaving this rate at 25%. In this way, the cabinet creates financial scope to strengthen the economy, especially now.
The cabinet is encouraging companies to make investments with a new investment discount from 2021, the job-related investment discount (BIK). When companies make an investment, such as the purchase of a new machine, they receive a discount that they can deduct from the payroll tax. Details of the scheme are being further elaborated.
The lowering of the low corporate tax rate from 16.5% to 15% will continue. In addition, more SMEs will pay this lower rate in the coming years. From 2021, the low rate will apply to winnings up to € 245,000 instead of € 200,000. In 2022, this limit will be further increased to € 395,000.
Measures for all of us
The cabinet is improving access for starters to the housing market. From 2021, housebuyers aged 18 to 35 will no longer pay transfer tax. Investors are going to pay more: from 6% to 8%.
The cabinet also offers tax relief. Savers and small investors with assets up to € 50,000 (or € 100,000 with a tax partner) will no longer pay tax on those assets from 2021. The rate of the tax will increase slightly from 30% to 31%. As a result, the number of small savers and investors paying box 3 tax will go down for almost 1 million people. And it means that everyone with savings or invested capital up to € 220,000 (or € 440,000 with a tax partner) will pay less tax on it.
By moving forward the increase in the employed person's tax credit from 2022 by one year, working will increase wages in the coming year. Both employees and the self-employed benefit from this. This increase is in addition to an increase previously planned for 2021. The general tax credit will also be increased by an additional € 22, on top of the € 60 that was already planned. In 2021, the basic income tax rate will decrease from 37.35% to 37.10%. The government will lower this rate further between 2022 and 2024, to ultimately 37.03%. Finally, the elderly person's tax credit will also be increased.
Taxes for entrepreneurs
The self-employed person's allowance will be further reduced. The cabinet will compensate for this, so that most self-employed people will still benefit from it next year (employed person's tax credit and changes in income tax). The cabinet is phasing out the self-employed person's allowance more quickly and more strongly, on top of the steps already started last year. The deduction will be reduced annually from next year; until it comes to € 3,240 in 2036. This was originally € 5,000 in 2028. This will reduce the differences in tax burden between employees and the self-employed.
Multinationals will be taxed more fairly for the business climate. Now it can happen that companies that make a profit in the Netherlands do not pay tax here due to the settlement of losses or of certain deductions. Especially in difficult economic times, it is important that some companies do not have more options to lower their tax burden than others. This is therefore being tackled with 2 measures from the advice of the Advisory Committee on taxation of multinationals (Ter Haar Committee). These measures are:
1. Settlement of losses at companies will be limited from 2021; this structurally yields € 555 million. As a result, the corporate tax paid by companies is more constant and the group of companies that pay no tax at all in a year is reduced.
2. So-called informal capital structures will be tackled by 2022, resulting in a structural return of € 173 million. These structures allow companies within a group to avoid tax by exploiting differences between tax systems. This is undesirable and will be adjusted.
We are also investigating the tax treatment of loan and equity capital more equally. Companies now finance a lot with loans and are therefore vulnerable. Borrowing (borrowed capital) is now tax-advantaged. We are investigating whether this can be tackled effectively with a capital deduction, whereby the tightening of a generic interest deduction restriction (earnings stripping measure) will be included.
In addition to the 2021 Tax Plan, the bill on the liquidation and discontinuation loss scheme was also sent to the House of Representatives on King's Day. As of 2021, this will end the unlimited deduction of certain losses in the Netherlands when business activities abroad are discontinued.
Taxes for the climat
In the Climate Agreement it has been agreed that industrial companies will be encouraged to invest in order to emit less CO2. If companies still emit too much CO2, they will pay a CO2 tax. The levy is designed in such a way that the target will be achieved by 2030 while at the same time maintaining the competitive position of Dutch companies and the Netherlands as a country of residence. The more efficiently a company produces, the less tax it has to pay. Only companies that do not realize the agreed reduction in CO2 risk a levy in 2030 of € 125 per ton of excess CO2 emitted, according to current insights. The rate is recalibrated with new insights, after recalculation by PBL. The CO2 tax takes into account the consequences of the corona crisis for the industry. Industry as a whole is expected to pay for emissions for the first time in 2024, unless they take adequate reduction measures. Companies that do not produce sufficiently efficiently already pay for their emissions.
Vehicle taxes are being adapted to stricter environmental requirements. The electricity at charging points for electric cars will remain relatively cheap up to and including 2022. It will be more attractive for ships to use more environmentally friendly shore power (instead of own generators) by lowering the rate for shore power
The cabinet is working on improvements in the benefits system. The Tax Plan contains proposals to achieve this: a fairer system, with more attention to the human dimension. The proposals regulate that the position of people with an allowance in relation to the Tax and Customs Administration / Benefits will improve. The Tax and Customs Administration / Benefits will soon be able to offer better customization to people who have to repay excess benefits received. And the personal situation is taken more into account. For example, people can receive more childcare allowance if their spouse is admitted to a nursing home. These are the first steps towards improvement. In the future, further measures will be taken to prevent parents from getting in trouble because of the benefits system.
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