What does Prinsjesdag 2019 mean for companies and entrepreneurs
Last Tuesday it was Prinsjesdag. Traditionally, the day on which the Minister of Finance, among other things, offers the bill of millions, the government budget and the tax plans to the chairman of the House of Representatives. The plans show that the Dutch generally have more left over from every euro that comes in, but what do the proposals mean for their own cause? In this blog we provide an overview of the most important changes for companies and entrepreneurs.
Corporate income tax
Rate does not fall
One of the most striking changes concerns corporation tax. Contrary to what we wrote in an earlier blog, the corporate income tax rate for profits from € 200,000 does not decrease in the coming year (it remains 25 percent). The rate will fall to 21.7 percent in 2021 instead of 20.7 percent. The low rate on profits up to and including € 200,000 will decrease further in 2020. From 1 January 2020, no tax interest will be charged on corporation tax if the tax return is filed for the first day of the sixth month and the tax return is correct. Finally, the plans announce that the discount on corporation tax will be abolished on 1 January 2021.
Entrepreneurs who make a profit from innovative activities have to pay less corporate income tax on this part of the profit. The rate for this innovation box is now still at 7 percent and will increase to 9 percent from 1 January 2021.
Liquidation and strike loss scheme
Companies can now still lose unlimited, as a result of the dissolution of a subsidiary or the cessation of business activities abroad, deducting the profit made in the Netherlands. This so-called liquidation and strike loss scheme is adjusted so that companies can deduct the loss less often and therefore pay more taxes.
Tax advantage for electric delivery vans
The cabinet wants to continue the tax breaks for electric vehicles in the coming years. Entrepreneurs with a fully electric delivery van therefore pay no motor vehicle tax until 2025. To further stimulate the purchase of fully electric delivery vans, the Cabinet wants to gradually reduce the discount on motor vehicle tax for delivery vans on diesel or petrol. This means that from 2021 the motor vehicle tax for delivery vans with petrol or diesel will rise slightly every year. Exactly how much the amount increases depends on the weight. On average, this amounts to € 24 per year per delivery van.
Reimbursement of electric cars goes up
From 1 January 2020, the addition for fully electric lease cars goes up step by step. In 2020, the addition will increase from 4 to 8 percent over the catalog value. Is the value higher than € 45,000? Then from € 45,000 a 22 percent additional tax applies. Now this is from € 50,000. In the following years, the percentage continues to rise.
Self-employed person's allowance
The government wants to treat tax-free self-employed and salaried employees. In 2020 the self-employed deduction will therefore be reduced from € 7,280 to € 7,030. This deduction will be further reduced in the coming years. In 2028 the self-employed person's deduction will still be € 5,000. The labor credit and the general tax credit will go up in the coming years.
Sole traders receive a new VAT number
All sole traders in the Netherlands receive a new VAT number before 1 January 2020. The new number then no longer contains the owner's citizen service number.
The small business scheme will be renewed
From next year, different rules will apply to the small business scheme. From 2020 an exemption from the VAT obligation applies if you are a VAT entrepreneur, the turnover does not exceed € 20,000 per year and the company is established in the Netherlands.
Employers and staff
Another measure that the government is taking to reduce the difference between employees and the self-employed is the announced increase in the employed person's tax credit. Employees will receive € 420 more discounts next year than in 2019 and from 2021 an additional € 324 will be added. This means that in 2020 the maximum discount will increase from € 3,399 to € 3,819 (€ 78 higher than planned) and in 2021 it will be € 4,143.
Lower ww premium for employees with a permanent contract
Employers will pay less ww premium for people in 2020 in permanent employment (2.94 percent) and more for flex workers (7.94 percent). Employers pay an average unemployment insurance premium for the number of permanent employees and flex workers. If there are many permanent employees, the premium is lower. If flexworkers are used a lot, the premium is higher.
Extras for staff
The work-related costs scheme will be expanded with effect from 1 January 2020. From then on, employers can give up to € 2,000 more in tax-free allowances. This free space will be increased by 0.5 percentage point as of 2020 to 1.7 percent. The expansion of the free space applies to the first € 400,000 of the wage bill. With this scheme, employers can for example give sports subscriptions or Christmas packages without having to pay wage taxes. An additional advantage is that settlement can also take place later, namely with the declaration for the second period.