Results Budget Day 2020
Results Budget Day 2020
With Budget Day behind us, we can take stock (provisional) with regard to the cabinet plans for entrepreneurs in 2021. Although the general considerations are currently taking place, we have listed the most important changes.
Contrary to earlier reports, partly due to the corona crisis, the corporate tax rate in the highest tax bracket will not decrease in 2021.
The first rate bracket will increase from € 200,000 to € 245,000. As a result, fewer companies fall into the highest bracket. The corporate tax rate on the first bracket (up to and including a taxable amount of € 245,000 will fall to 15%. The rate in the second bracket (from € 245.001) will remain 25% in 2021. In addition, the cabinet proposes to to extend the first rate bracket to € 395,000 As expected, the rate for the innovation box will increase from 7% to 9% from 2021.
Based on the Entrepreneurs Affected Sectors Allowance (TOGS), an allowance of € 4,000 was paid this spring, subject to conditions. SMEs still receive a Fixed Cost Allowance (TVL scheme). This allowance depends on the size of the company, the amount of the fixed costs and the lost turnover. The TOGS and TVL payments are not counted as profit. So no tax has to be paid on it.
Because attacks for 2020 will not be imposed until 2021 at the earliest, the government will allow entrepreneurs for corporate tax purposes with the option of settling an expected loss this year. In this way, tax refunds can be made earlier and the government hopes to avoid liquidity problems.
Liquidation Loss Scheme
The government has adopted a private member's bill on the liquidation loss scheme. This scheme means that a parent company can deduct the loss incurred from a participating interest if the subsidiary is dissolved. This prevents the unused losses from disappearing without any compensation. To prevent international companies from artificially dropping these kinds of losses in the Netherlands, the government proposes the following:
- limitation of the liquidation loss scheme to liquidations of subsidiaries in which the parent holds a qualifying interest (quantitative condition)
- limitation of the liquidation loss scheme to liquidations of subsidiaries established in the EU / EEA or a country with which the EU has an association agreement (territorial condition)
- limitation of the possibility of long-term postponement of the moment of deduction of a liquidation loss (temporal condition). A liquidation loss may only be taken if the liquidation takes place within three calendar years after the year in which the activities were terminated.
The first two conditions only apply if the loss is greater than five million euros. The third proposal, the temporal condition, always applies. The magnitude of the loss is irrelevant. In order to prevent the first two conditions from being circumvented with an (intermediate) holding company, a look-through provision will be made.
Entrepreneurs' deductions for income tax
The deductible items for entrepreneurs will be further cut back in the coming years. The rate at which entrepreneurs can deduct certain items will increase from 46% to 43% in 2021.
This limitation applies to:
• SME profit exemption
• co-working deduction
• self-employed person's allowance
• starter's allowance in the event of incapacity for work
• deduction for research and development work
• discontinuation relief
Self-employed person's allowance
The phasing out of the self-employed person's allowance will be accelerated. This deductible item will be reduced from 1 January 2021 by € 360 per year (instead of € 250). In the coming year, the self-employed deduction amounts to € 6,670. The government wants to use this measure to reduce the tax differences between the self-employed and people in paid employment. Ultimately, the self-employed person's allowance will drop to € 3,240 in 2036.
Non-residential transfer tax up
The transfer tax for non-residential buildings (commercial buildings) will increase from 6% to 8% from the new year.
For entrepreneurs who, in addition to their own business, also participate in a general partnership or partnership, changes occur in the calculation of the right to small-scale investment deduction (KIA). The level of the KIA per company is determined on the basis of the investment amount of that company.
What should HR work on?
Unemployment insurance premium
With effect from 1 January 2020, a low unemployment insurance premium will apply to employment contracts agreed in writing with a fixed amount of work. A higher unemployment insurance premium applies to flexible employment contracts. If part-time employees (35 hours or less) work 30% or more overtime on an annual basis, the previously applied low premium must be corrected retroactively to the high unemployment insurance premium. This obligation has been temporarily canceled in 2020, but will come into effect again from 2021.
The addition benefit for electric cars will be further reduced in the coming years. This percentage for the private use of a company electric car with a catalog value up to € 40,000 goes from 8% to 12%. A percentage of 22% applies to more expensive cars.
Work-related costs scheme (EAS)
Tax-free allowances to personnel must remain within the free space of the EAS. In 2021, this free space will amount to 1.7% for the first € 400,000 of the wage bill of all employees together. If the total wage bill is higher than this amount, a percentage of 1.18% applies, which was 1.2% in 2020. Incidentally, as a result of the corona crisis, the space for 2020 has been increased once and temporarily to 3% for the first € 400,000.
Tax-free study costs allowance
On the basis of the EAS, employers can reimburse untaxed costs for training aimed at generating income. From 1 January 2021, this will also apply to former employees who follow training after termination of employment. An individual learning budget that has not yet been used can also be used for training after the end of the employment.
We are happy to discuss what the plans mean for your situation. So if you have any questions, please do not hesitate to contact us.