News item | 20-12-2023 | 12:39
On December 19, the Senate approved the Tax Plan 2024 package. The package contains measures for society and the tax system that support purchasing power and simplify the tax system. You can find an overview of the most important changes here. Want to know exactly what will change for your personal situation in 2024? Then go to the ‘what does this mean for me’ tool from Wijzer in Geldzaken.
Income
The government has included a series of measures in the Tax Plan 2024 package that will leave workers, retirees and most self-employed people and entrepreneurs with more net income. Although the first income tax bracket will increase by 0.03%, the employment tax credit will be increased by € 115 and the general tax credit will be indexed. Entrepreneurs with a higher income will pay more tax. These IB entrepreneurs have to deal with the further reduction of the self-employed person’s deduction from the previous Tax Plan from € 5,030 to € 3,750 and the reduction of the SME profit exemption from 14% to 13.31%. As a result, they pay tax on a larger part of their profit or income. By reducing the SME profit exemption, we reduce the difference in tax treatment of employees and entrepreneurs in income tax.
The tax-free travel allowance and the tax-free volunteer allowance will also be increased. The tax-free travel allowance will go from 21 to 23 cents per kilometer. The maximum tax-free hourly allowance for volunteers aged 21 and over will be increased to €5.50 per hour as of January 1. For volunteers under the age of 21, the amount is increased to € 3.25 per hour. The total maximum volunteer compensation in 2024 is €2,100 per year and €210 per month.
To undertake
The second bracket in box 2 will come into effect on January 1. This measure was announced in the 2023 Tax Plan. As a result, from 2024, 24.5% tax will be paid on the first € 67,000 of income per person in box 2. People pay 33% tax on all income above € 67,000.
In addition, two additional measures were taken during the discussion of the Tax Plan in the House of Representatives. For example, from 2024 the 30% ruling will be limited to the Balkenende standard (€ 233,000 in 2024) and the amount of exemption will also be gradually reduced. An exemption of 30% of the salary applies for the first twenty months, an exemption of 20% applies for the following twenty months and a 10% exemption applies for the following twenty months. In addition, borrowing from your own BV will be further maximized by reducing the amount from €700,000 to €500,000.
Power and housing
The cabinet has decided to implement two refinements to the bridging law box 3 with retroactive effect to January 1, 2023. These measures therefore already apply to your 2023 income tax return. For example, the assets of a reserve fund of an Owners’ Association (VVE) ) and the money in a escrow account of a notary from that moment on in the bank balances category. In addition, mutual claims and debts between tax partners and between parents and minor children are no longer taxed in box 3. People no longer have to declare these debts for tax purposes. This way, the tax on wealth is better distributed. During the discussion of the Tax Plan, the House of Representatives decided to increase the tax rate in box 3 from 32% to 36% as of January 1, 2024. The tax-free allowance will not be adjusted. That remains €57,000 (€114,000 for a tax partnership).
The home value limit for the starter exemption has been increased to €510,000 for 2024 (€440,000 in 2023). Furthermore, from January 1, it is no longer possible to make a tax-free donation for the purchase of a home.
To limit the pressure on tax legislation and the judiciary and to prevent legal protection from being abused for a revenue model, from 2024 the legal costs reimbursement will be transferred directly to the citizen or company on behalf of whom an objection has been lodged. This compensation will also be reduced to 25% of the current compensation if the citizen or company is substantively in favor of an objection or appeal regarding the WOZ or bpm.
climate
The energy tax reduction, the fixed amount deducted from the energy bill per connection, will be increased to €631.39 including VAT per year as of January 1. The discount applies, among other things, to homes and office buildings. In addition, as of July 1, passengers of most private aircraft will pay air passenger tax due to an adjustment to the weight limit of aircraft. This will be reduced from 8,616 kilograms to 4,000 kilograms.
Fuel excise tax
To further support purchasing power, the House of Representatives has also decided to keep the fuel excise rates in 2024 the same as the rates that apply on July 1, 2023. The excise duty for a liter of petrol will therefore remain 79 cents, a liter of diesel 52 cents and a liter of LPG 19 cents.
Health
As of 2024, the consumption tax on sugary drinks will be increased from €8.83 to €26.13 per 1000 liters. From that same moment, mineral water is exempt from consumption tax.
To encourage a healthy lifestyle and discourage unhealthy choices, the government is also increasing excise duties on alcohol and tobacco. The excise rate on alcohol will be increased by 8.4% from 2024. From April 1, the excise duty on cigarettes will be €7.81 per pack of 20 cigarettes and the excise duty on rolling tobacco will be €17.35 per pack of 50 grams. From April 1, 2024, a pack of cigarettes (20 pieces) will cost an average of €11.10 and a pack of rolling tobacco (50 grams) will cost €24.62 incl. VAT.