Tax plan 2024 package adopted by Lower House

30 October 2023

At the end of September, we already informed you about the Tax Plan 2024. During the night of 26 to 27 October 2023, the Lower House approved the 15 bills of the Tax Plan 2024, the Tax Collective Act 2024 and the Minimum Tax Act 2024.

In doing so, the Lower House adopted among others the following amendments:

1. The top rate in box 2 will be increased from 31% to 33% as of 1 January 2024;

2. The rate in box 3 will be further increased to 36% as of 1 January 2024;

3. The abolition of the gift deduction in corporate income tax for gifts below €100,000 will not go ahead. To cover this, the maximum amount for excessive borrowing from one’s own bv will be reduced from €700,000 to €500,000;

4. As of 2025, the buy-back facility in the dividend withholding tax will cease to exist, so that the purchase of own shares will henceforth be taxed as heavily as the payment of dividends;

5. The proposed reduction in the SME profit exemption for 2024 will be almost halved, bringing the SME profit exemption to a rate of 13.31%;

6. The 30% arrangement will be scaled back from 1 January 2024. It will be set at 30% of the taxable wage for the first 20 months, at no more than 20% of that wage for the following 20 months and at no more than 10% of that wage for no more than the following 20 months. After 60 months, the 30% arrangement expires. There is a transitional arrangement for employees who held a 30% ruling in the last period of 2023;

7. The bank tax will be increased. The rate on the part of the taxable amount relating to short-term debt will be increased from 0.044% to 0.058%. The rate on the part of the taxable amount relating to long-term debt is increased from 0.022% to 0.029%;

8. The energy tax credit is increased by €23.40 to €521.78 (excluding VAT) for 2024;

9. The proposal to increase excise duty on alcohol by 16.3% is almost halved. However, the excise duty rate on tobacco is increased;

10. A taxpayer or withholding agent is given a right to make a request to inspect his tax records. A decision on a request for inspection is an appealable decision, so it is open to objection and appeal. The tax secrecy obligation does not then apply;

11. The excise duty rebate on petrol, diesel and LPG applicable from 1 July 2023 is extended for one year and the regular increase (indexation) from 1 January 2024 is not implemented;

12. The low percentage of the exemption goingconcern value of the business succession scheme in the gift and inheritance tax (BOR) will be reduced from 83% to 75% as of 1 January 2025. For coverage, first, the €9m structural estimate difference of real estate leased to third parties BOR and DSR will be used. Second, the green savings and investment scheme will be scaled down. As of 1 January 2025, the green investment exemption will be reduced to € 30,000.