Expected changes in taxation

The Dutch government’s plans for 2021 were announced on Budget Day, which was on 15 September this year. There will be three key changes in the area of taxation that we have highlighted for you in this article. The new year is expected to bring:
1. A lower corporate income tax rate
2. A higher tax rate on income from substantial interests (Box 2)
3. Three changes in transfer tax

1. Lower corporate income tax rate

The rate of Dutch corporate income tax will be lowered. The lowest rate was 16.5% on profits of up to € 200,000 (and 25% on anything above that). This rate will be lowered considerably, i.e. to 15% on profits of up to € 245,000 (and 25% on anything above that). From 2022 onwards, the 15% rate will apply to profits of up to € 395,000.

This will significantly reduce your tax burden, freeing up funds for you to do business. Please get in touch with your adviser if you expect your profit to be higher than € 245,000 (and € 395,000 from 2022 onwards). He or she would be happy to tell you how to make the most efficient use of the reduced tax rate.

2. Higher tax rate on income from substantial interests (Box 2): more tax-efficient to distribute dividends in 2020?

On 1 January 2021, the Dutch tax rate on income from substantial interests (Box 2) will increase from 26.25% to 26.9%. That is why you may want to distribute any dividend before 2021. If the dividend is € 100,000, you will save € 650 in tax.

Tax-free amount

Please remember to look at this in correlation with tax on capital gains (Box 3). The tax-free amount in this tax band may cancel out your tax benefit. Contact your accon■avm adviser to discuss what would be the best option for you.

3. Transfer tax

There will be three changes in transfer tax in 2021: first-time home buyers will be eligible for an exemption, the 2% rate will apply to homes that serve as a principal residence only and transfer tax will be due at a rate of 8% in all other situations.

One-off exemption

A first-time buyer is defined as a person who buys a property as their principal residence and is 18 to 34 years old. They will be eligible for an exemption with effect from 1 January 2021. The exemption, which will only apply once, may motivate a buyer to postpone their purchase or conveyance date to 2021.

Increase in rate

The 2% rate for residential properties, which now applies across the board, will be increased to 8%. Next year, natural persons buying a home to serve as their principal residence will be the only ones to qualify for the 2% rate. Transfer tax will be due at a rate of 8% in all other situations. This applies to a second home or to a company buying a residential property as well. If you are considering buying a second home or a residential property for a child, you may want to bring that purchase forward; this will save you 6% in tax.

Commercial properties

It was announced as early as last year that the rate of transfer tax due on commercial properties would be increased to 7% on 1 January 2021 (now: 6%). The 8% marks an even further increase. This may motivate you to bring forward the conveyance date; it will save you 2% in tax. Besides transfer tax, there are multiple other aspects that play a role in your investment decision. Ask your adviser for input.

More information

The plans have yet to be adopted before becoming final. Please do not hesitate to contact your Accon International adviser to find out more about what to expect in terms of taxation in 2021. He or she would be happy to answer your questions and explain the most tax-efficient solutions to you. You can also get in touch with us by sending an email to international@acconavm.nl.