The most relevant changes opposed to the original plans:
Corporate income tax
The deduction of certain donations up to an amount of EUR 100,000 will not be abolished.
Donations driven by personal motives of shareholders made by the company will, in line with the original proposals, still not be regarded a (hidden) distribution to its shareholders for both personal income tax and dividend withholding tax purposes as of 2024.
Dividend withholding tax
Abolishment of the tax-free repurchase facility for listed companies as from 1 January 2025. This means that share buyback programs by listed companies in the Netherlands will in general be subject to Dutch dividend withholding tax.
Increase of the tax rate regarding short-term loans from 0.044 per cent to 0.058 per cent as well as the general tax rate from 0.022 per cent to 0.029 per cent.
Limitation of the so-called 30 per cent regime for incoming expats. The 5-year term remains applicable, but the tax-free allowance provided for under this regime will be gradually decreased from 30 per cent to 10 per cent during this period. This does not affect existing 30 per cent rulings. This amendment is in addition to the cap of the 30 per cent ruling to wages up to EUR 233.000, which is set out in more detail in this article on our website.
Personal income taxation
Abolishment of the partial foreign tax regime for incoming expats as per 1 January 2025. This affects specifically expats benefitting from a 30 per cent ruling. They will become subject to tax for their income from so-called substantial shareholdings (box 2) as well as for their net wealth position (box 3). Transitional rules until ultimo 2026 are available for individuals currently applying the partial foreign tax regime.
The tax rates for income from substantial shareholdings (box 2) and income from wealth (box 3) are both increased with an additional 2 per cent. As a result, the new rates will be 33 per cent for box 2 (income above EUR 67,000) and 36 per cent for box 3.
Furthermore, as of 2023, excessive current account debts of substantial shareholders are taxed as a deemed dividend. The threshold for excessive debts will be decreased from EUR 700,000 in 2023 to EUR 500,000 as from 2024.
Dutch parliament made quite some changes to the original proposed Tax Plans. As indicated earlier, this can be seen in light of the upcoming elections. We will keep you informed on further developments, for instance during the First Chamber parliamentary proceedings. Should you have any questions with respect to the above, please contact your trusted adviser.