Budget Day (‘Prinsjesdag’) is an annual Dutch tradition that takes place on the third Tuesday of September each year, during which the Dutch government launches its plans for the coming year, including financial plans.
This year, Budget Day took place on 17 September 2024. CIS Management summarised below some of the changes that will be important for Dutch businesses.
Changes in the earning stripping scheme (‘earningsstrippingmaatregel’)
A generic interest deduction restriction applies to Dutch CIT since 2019. This entails that interest is not deductible to the extent that the net interest expenses exceed 20% of the profit and 1 million EUR. In 2025, this threshold will be adjusted to 25% of the profit, and as far as real estate entities are concerned that are renting real estate to third parties, the threshold of 1 million EUR will be abolished.
As usual, non-deductible interest can be carried forward to subsequent fiscal years.
Donations no longer deductible for CIT
Donations made by Dutch entities to public benefit organisations (‘algemeen nut beogende instelling’) and SBBI support foundations with a maximum of 100,000 EUR per year could be deducted from the profit for the purpose of CIT returns, if the deduction does not exceed 50% of the profit.
This will be no longer possible from 2025.
New income tax rate
In 2024, personal income up to 75,518 EUR is taxed at 36.97% and income exceeding 75,518 EUR is taxed at 49.5%.
In 2025, there is a minor adjustment to the income tax rate. Personal income up to 38,441 EUR will be taxed at 35.82% and thereafter 37.48% until 76,817 EUR. Income exceeding 76,817 EUR will be taxed at 49.5%.
(Partial) re-introduction of 30% ruling
Foreign workers that move to the Netherlands from another country for work can benefit from the 30% ruling if they meet certain conditions. This entails that 30% of the employee’s salary will be exempted from income tax. Whereas this is valid for 5 years, the Dutch House of Representatives recently reduced the benefits to 30% in the first 20 months, 20% during subsequent 20 months and 10% during the last 20 months.
From 2027, the benefits will be partially re-established, whereby qualified workers can have 27% of their salary exempted from income tax for 5 years, without the rate being reduced gradually.
VAT rate adjustment for culture, books, sports and accommodation
Currently, a reduced VAT rate of 9% applies to culture, books, sports and accommodation. This includes, for example, hotels, (e-)books, newspapers, concerts, festivals, sports events, sports clubs and museums. Starting from 2026, these goods and services will be subject to the regular VAT rate of 21%.
Please, Contact CIS Management for further information.