Which tax-related measures can you still benefit from this year as an entrepreneur? How can you respond smartly now to changes that will apply from 2024? Here are ten practical tips.
Please note: Some of these tips relate to proposals in the 2024 Tax Plan that still have to be approved by the Lower and Upper House. The government also frequently announces new plans or revises its plans. It is therefore important to always contact your advisor to discuss the situation.
1. Pay out a dividend in 2023 or not?
From 1 January 2024 the rate in box 2, which also applies to dividend income, is changing. The current rate of 26.9% will be replaced with two rates. A rate of 24.5% will apply to income up to € 67,000 (or a collective amount of € 134,000 for tax partners), with a rate of 31% applying above this figure. Bear in mind that, following a motion passed by the Lower House, the higher rate applicable from 1 January 2024 may be set at 33% instead of 31%. Take steps to anticipate the forthcoming rate changes in box 2 as well as you can. The question to consider is whether it is advisable to pay out a dividend in 2023 or instead wait until 2024 and subsequent years. The same applies to a planned sale of shares: is it best to proceed with this in 2023 or to wait until 2024? This question needs to be assessed in each individual case to make the right decision, as it all depends on your personal circumstances. You should therefore always consult with your (tax) advisor.
2. Take full advantage of the possibilities under the work-related expenses scheme
In 2023 make sure you take full advantage of the possibilities available to you under the work-related expenses scheme. This is particularly important, as the fixed budget will be reduced again in 2024. Up to a wage bill of € 400,000 the fixed budget is currently still 3%, but this will fall to just 1.92% in 2024. As in 2023, a rate of 1.18% will apply above this level in 2024. You should therefore assess the remaining amount of your fixed budget and think about whether allowances and benefits in kind that you are planning to grant in 2024 could possibly be brought forward to 2023.
3. Obligation for large employers to report on work-related personal mobility
Do you have more than 100 employees? If so, from 1 January 2024 you are required to record the CO2 emissions that result from the kilometres travelled by your employees. A record must be kept of all trips made by staff; this covers commuting and all other business trips. The Netherlands Enterprise Agency (RVO) will calculate the CO2 emissions on the basis of the data submitted. Do you meet the criteria? If so, you have until 1 January 2024 at the latest to adapt your records accordingly so you can keep track of this data. The data for 2024 will need to be submitted by no later than 30 June 2025. For the time being, there is only an obligation to report this data.
4. Review your corporation tax entity
If your companies are currently grouped together in a tax entity for corporation tax purposes, it is worth reviewing this. The tax entity pays corporation tax on the total profits of the combined companies. Given the difference between the lower and higher rate of this tax, terminating the tax entity may be beneficial. After all, in 2024 the difference between the rates will be 6.8 percentage points (19% and 25.8% respectively), with the lower rate applying to the first € 200,000 of your profit. If the tax entity is terminated, each company can take advantage of the lower rate separately. Talk to your advisor to make sure that terminating the tax entity would not have any other (adverse) consequences.
5. Don’t miss out on tax credits
With effect from 2023 a taxpayer with little income no longer receives a partial payment of the general tax credit, employed person’s tax credit and income-dependent combination tax credit. If your partner has no or insufficient income of their own, but together with your partner you have taxable assets (box 3), you can use these assets to (partially) prevent the loss of tax credits. You do this in your tax return by allocating all or part of the assets to the partner who has no or little income of their own. If you have a company, you can also decide to pay out a dividend and allocate part of that dividend to your partner. Assets and/or dividends that you allocate to your partner are taxable for your partner, which means that he or she can then take advantage of the tax credits in full or in part.
6. Be aware of significant changes to the business succession scheme and transfer facility in 2024
The business succession scheme (BOR) and transfer facility (DSR) are important facilities relating to the gifting or inheritance of a (family) company. Changes are being made to the BOR and DSR from 2025, although one aspect is being introduced earlier, from 1 January 2024. This means that any property rented out must be designated as an investment. In many situations it already is, but due to this change this will automatically be the case from 2024. If you are considering gifting your company in the near future and would like to take advantage of the BOR or DSR, discuss with your advisor whether – in view of the above changes – it would be advantageous to do this in 2023 or 2024 or instead wait until 2025.
7. Gift deduction by companies to be scrapped
In the area of corporation tax there is a facility that allows the deduction of gifts. This is possible up to a maximum of 50% of a company’s profit, but can never exceed € 100,000. Provided that you remain within this limit, the gift is also not regarded as a disguised dividend paid to the shareholder(s). The possibility for companies to deduct gifts is being scrapped, however. This means that, from 2024, gifts made by companies will no longer be deductible. On the other hand, from that point on such payments will never be regarded as a disguised dividend, i.e. even if the gift exceeds 50% of the profit or € 100,000. Are you considering making a gift from your company to an ANBI (public benefit organisation)? If so, do this by 31 December 2023 so you can deduct it in 2023. Your company must, of course, have made a sufficient profit in 2023 for this to be possible. Costs for which you receive something in return (such as sponsorship or advertising) will remain deductible in the normal way.
8. Make energy-saving investments in 2023
In 2024 the energy investment deduction (EIA) will be reduced from 45.5% to 40%. If you are planning to make energy-saving investments in the near future, do this in 2023 if possible. Make sure you take any related effects into account, such as the impact on the level of your profit and on the small-scale investment tax credit (KIA).
9. Take advantage of the ISDE this year
2023 is the last year in which you can take advantage of the renewable energy and energy-saving investment subsidy (ISDE) for small-scale wind turbines and solar panels A budget of € 30 million has been set aside for this in 2023. All legal entities, but also partnerships, foundations, general partnerships and limited partnerships, are eligible for this subsidy.
10. Arbitrary depreciation in 2023
In 2023 you are allowed to arbitrarily depreciate a number of new capital goods in which you invested this year. In this way you can reduce your profit in 2023, which can result in an immediate tax saving. On the other hand, this means that over the remaining years the depreciation on these goods will be lower and you will therefore pay more tax then. Arbitrary depreciation is therefore not necessarily always beneficial, for example if your profit in 2023 is taxed at a lower rate than in future years. Under this facility, in 2023 you can arbitrarily depreciate, on a one-off basis, 50% of the cost of the asset, taking the residual value into account. The other 50% must be depreciated in the normal way. However, you can also choose to apply less or no depreciation at all to half of the investment amount (minus the residual value), so that you can depreciate more in future years. Consider applying arbitrary depreciation in 2023 if this will be advantageous for you.
