Tax Plan 2023 - House of Representatives partially adopts the 2023 Tax Plan package

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House of Representatives partially adopts the 2023 Tax Plan package

On 10 November, the House of Representatives approved most of the bills included in the 2023 Tax Plan, with the exception of the Amendment to the Environmental Management Act.

29 November 2022

Introduction

On 10 November 2022, the House of Representatives approved the following bills included in the 2023 Tax Plan, which was submitted on Budget Day:

  • 2023 Tax Plan
  • Box 3 Bridging Act
  • Restoration of Rights Box 3 Act
  • Minimum CO2 Price (for Industry) Act
  • Delegation Provision (to Omit Interest on Overdue Tax in Specific Cases) Act
  • Increase of the child-related budget and adjustment of the low-income allowance.

 

On 10 November 2022, the House of Representatives also adopted the 2023 Collective Act for Tax Purposes, as well as a bill providing for implementation of the EU Directive on the exchange of information in the digital platform economy into Dutch law. However, at the request of the State Secretary the vote on the amendment to the Environmental Management Act regarding the transition period on the introduction of a carbon border adjustment mechanism was postponed. The House of Representatives adopted amendments for three of the bills referred to above, which we will discuss below.

Evaluation possibility anti-arbitration clause regarding reference date

An amendment to the Box 3 Bridging Act provides for the possibility to analyse the scope of the anti arbitration clause regarding the reference date included in this Act during the period when the box 3 bridging system has effect and to adapt it, if necessary.

Increase of consumption tax on non-alcoholic beverages postponed to 2024

An amendment to the Tax Plan 2023 postpones the increase of the consumption tax on non-alcoholic beverages, as proposed in the bill, to 1 January 2024. As a result, this increase will coincide with the date on which mineral water will be exempted from the consumption tax. This also reduces the administrative burden, both for businesses and the Tax and Customs Administration. The postponement does result in a slightly higher increase.

Introduction of new first bracket in energy tax on electricity and natural gas

Another amendment to the Tax Plan 2023 introduces a new first bracket in the energy tax on electricity effective from 1 January 2024. Because the new first bracket taxes consumption between 0 - 2,900 kWh, the second bracket will be between 2,900 to 10,000 kWh. Implementing a short first energy tax bracket will make it possible to offer small consumers much more energy tax targeted relief through the rate effective from 2024. For now, though, the energy tax rates of the new first and second brackets are the same.

What’s more, a new first bracket will be introduced in the energy tax on natural gas as of 2024. Because the new first bracket taxes consumption between 0 - 1,200m3, the second bracket will be between 1,200 m3 to 170,000 m3. This amendment serves the same purpose as the implementation of a new first rate bracket for electricity, which is to provide more targeted relief for small consumers. Here, the rates of the first and second brackets are exactly the same as well.

Extension of tax regime for charging stations

A final amendment to the Tax Plan 2023 provides for a two-year extension of the current tax regime for charging stations. Hence, charging stations will continue to be subject to a reduced energy tax rate and will remain exempt from the Surcharge for Sustainable Energy and Climate Transition.

This extension involves a budgetary loss of a total of EUR 42 million, to be covered by an additional gaming tax increase to 29.5% (the original plan provided for a rate increase from 29% to 29.3%) and by an additional increase in the excise duty on smoking tobacco.

Extension of low-income allowance cancelled

The planned extension of the low-income allowance for the year 2024 has been cancelled. In fact, this low income allowance will be abolished completely in 2025. According to an amendment adopted by the House of Representatives, budgetary reasons would make it more desirable to refrain from extending it before abolishing it. In any case, the House of Representatives considers the low-income allowance an inefficient and ineffective scheme, offering employers an incentive to keep wages low.

The House of Representatives has passed six of the seven bills making up the Tax Plan 2023 package. They will now be deliberated in the Senate and are expected to be voted on in the week before Christmas. However, consideration of the proposed amendment to the Environmental Management Act related to the transition period in implementing a border carbon adjustment mechanism has been deferred.

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