Dutch Senate adopts 2018 Tax Plan | Deloitte

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Dutch Senate adopts 2018 Tax Plan

2018 Tax Plan - Budget Day (Prinsjesdag)

On 19 December 2017, the Dutch Senate approved all elements of the 2018 Tax Plan package. A bill was adopted, too, providing for a phase-out of the deduction facility relating no more or a minor home acquisition debt (Hillenregeling).

21 December 2017

2018 Tax Plan

On 19 December 2017, the Senate agreed to all elements of the 2018 Tax Plan package. This concerns the following bills:

  • 2018 Tax Plan
  • Other 2018 tax measures
  • Act on tax deduction obligation for holding cooperatives and extension of the withholding exemption
  • Act on cancellation of the VAT agricultural scheme


The majority of the measures included in these bills takes effect on 1 January 2018. The Senate has also agreed to the phase-out of the deduction facility relating no more or a minor home acquisition debt (Hillenregeling). From 2019 onwards, this tax credit will be phased out annually by 3.33%, until the facility ceases to exist in 2048.

The following summarises the rates and percentages applicable in 2018.

Corporate income tax

The corporate income tax rates and tax bands will not change in 2018. The rate is 20% up to a taxable amount of EUR 200,000 and any excess is subject to the regular rate of 25%. In the coming years these rates will gradually be reduced by a total of four percentage points, down to 16% and 21%, respectively, in 2021.

These future tax rate cuts are balanced by the reversal of the previously proposed extension of the first tax band. Moreover, the effective rate for benefits eligible for the innovation box will be raised to 7% as early as 1 January 2018.

Income tax

Box 1 (income from work and home ownership)

In 2018, the following rates apply for taxpayers born after 1 January 1946 who have not yet reached their pensionable age:

Box 1 income exceeding

But not exceeding

Tax rate

Rate national insurance contributions

Total

-

EUR 20,142

8.90%

27.65%

36.55%

EUR 20,142

EUR 33,994

13.20%

27.65%

40.85%

EUR 33,994

EUR 68,507

40.85%

-

40.85%

EUR 68,507

-

51.95%

-

51.95%

 

The rates for taxpayers who born on 1 January 1946, but who have reached their pensionable age in 2018, are as follows:

Box 1 income exceeding

But not exceeding

Tax rate

Rate national insurance contributions

Total

EUR  20.142

EUR  33.994

13,20%

9,75%

22,95%

EUR  33.994

EUR  68.507

40,85%

-

40,85%

EUR  68.507

-

51,95%

-

51,95%

 

Taxpayers born before 1 January 1946 continue to be subject the same rates shown in the table above, although the limits of the brackets are slightly different:

Box 1 income exceeding

But not exceeding

Tax rate

Rate national insurance contributions

Total

EUR  20.142

EUR  34.404

13,20%

9,75%

22,95%

EUR  34.404

EUR  68.507

40,85%

-

40,85%

EUR  68.507

-

51,95%

-

51,95%

 


Box 2 (income from substantial interest)

The rate in box 2 does not change and continues to be 25% in 2018..


Box 3 (income from savings and investments)

As from 2018, the figures used to calculate the fixed yield over the savings component of box 3 capital will be more up-to-date. This results in the following fixed yields for the different classes of capital:  

Basis box 3

fixed yield 2018

EUR  0 – EUR  70.800

2,02%

EUR  70.800 – EUR  978.000

4,33%

> EUR  978.000

5,38%

 

The rate in box 3 does not change and continues to be 30% in 2018. However, the non-taxed capital has been raised to EUR 30,000 per taxpayer (2017: EUR 25,000).

Social security contributions

  • The contribution rates for the social insurances will be the same in 2018: 17.90% (General Old Age Pensions Act - AOW), 0.10% (Surviving Dependants Act - Anw) and 9.65% (Long-Term Care Act - WLZ), respectively.
  • The income assessable for social insurance in respect of the levy of employee insurance contributions will be capped at EUR 54,614 in 2018.
  • The percentage of the income-related employer's contribution as regards the Healthcare Insurance Act (ZVW) is 6.90% in 2018. The income-related ZVW contribution for people subject to compulsory insurance is 5.65%.
  • The Basic Contribution for the Invalidity Insurance Fund (AO) has been set at 6.27% for the year 2018.
  • The contribution for the General Unemployment Fund (AW) is 2.85% in 2018.
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