Prinsjesdag and your bv: these are the tax plans

On Prinsjesdag 2023 (Budget Day in the Netherlands), the Dutch government announced numerous plans for 2024 that will affect your private limited company, or bv as it is known in the Netherlands. Below is an overview of measures the government intends to make next year.

For more updates about Budget Day in the Netherlands in English, check the Prinsjesdag homepage.

Rules and regulations for businesses in the Netherlands

Check Business.gov.nl for a list of all the government plans announced on Prinsjesdag that will impact businesses.

Corporate income tax rates and tax brackets in 2024

The corporate income tax brackets and rates will not change in 2024. This means the profits of your bv (private limited company) up to an amount of €200,000 will remain in the first bracket. The rate for this tax bracket is 19%. So, for example, on a profit of €200,000, you pay €38,000 in tax.

Is your bv’s profit more than €200,000? Then the amount above €200,000 falls in the second bracket. A rate of 25.8% applies to this second bracket.

The rate for the Innovation Box also remains the same as in 2023: 9%.

Check the overview of Dutch tax rates in 2023.

Abolition of gift deduction for a bv

From 1 January 2024, you can no longer use the business gift deduction. This means that you can no longer deduct donations to a ‘public benefit organisation’ from your profits. In Dutch, these are known as 'Algemeen Nut Beogende Instellingen' (ANBI) or 'Sociaal Belang Behartigende Instellingen' (SBBI). On the other hand, a non-business gift to an ANBI or SBBI is no longer seen as a hidden profit distribution to the shareholder.

In 2023, you may still deduct a donation to an ANBI or SBBI from the profit. The maximum gift deduction per year is 50% of the profit, up to a maximum of €100,000.

Making business premises or rental property more sustainable

If you want to invest in insulation measures for your business, you can use the sustainable energy investment subsidy (ISDE) for the first time in 2024. The government plans to expand the scheme to include insulation. On the other hand, the subsidy can no longer be used for solar panels or wind turbines. In 2023, this is still possible.

The ISDE is a subsidy for homeowners and entrepreneurs to make their homes or business premises more sustainable. The ISDE subsidy can already be used by businesses in 2023 (in Dutch). For example, for the purchase of (hybrid) heat pumps and solar boilers. If you use the ISDE subsidy for business purposes, you cannot register this investment for the Energy Investment Allowance (EIA).

The Energy Investment Allowance will be reduced

If you invest in energy-saving and sustainable business assets, you may be eligible for the Energy Investment Allowance (EIA). This allows you to deduct a percentage of the cost of your investment from your profit. As a result, you pay less tax.

The EIA for entrepreneurs will be extended by 5 years, until 2028. However, the percentage you are able to deduct goes down from 45.5% to 40% in 2024. The minimum investment is €2,500, and the maximum investment is €136 million.

The amount you can deduct will go down every year. Do you have a big business investment planned? It may be wise to do this in 2023. That means you can benefit from the deduction of 45.5% of the cost of the investment.

Business succession scheme scaled down and simplified

When inheriting or being given a business, you get tax exemptions if you use the Business Succession Scheme (BOR). The government wants to take the first step towards simplifying and scaling down that scheme in 2024.

Thanks to the BOR, you get tax exemptions on your business assets when you are given or inherit a business. If you have leased immovable property to third parties, it will fall under investment assets by default from next year. As a result, it can no longer fall under the BOR.

The BOR will be further restricted in 2025. Business assets of more than €100,000 that you use partly privately may then no longer be counted as business assets. The exemption to consider 5% of investment assets as business assets will also expire that year.

The 100% tax exemption through the BOR will increase from around €1.2 to €1.5 million in 2025. The exemption for the amount above this €1.5 million falls from 83% to 70%.

In addition to the BOR, you can also use the Transfer Scheme (doorschuifregeling, DSR) when you inherit or receive. Then the donor or testator (the deceased who leaves the inheritance) pays no income tax. The tax claim passes to the receiver.

The government also wants to amend the DSR. Currently, it only applies if the receiver has been employed by the company for 36 months at the time of receiving the company. With effect from 2025, this requirement will disappear. Both the BOR and the DSR will then require the receiver to be at least 21 years old.

Please note: it is not yet certain when exactly the amendments to the law will take effect

A legislative amendment or bill is subject to its passing through the upper and lower houses of parliament, or proclamation of the Order in Council (Algemene Maatregel van Bestuur, AMvB) or ministerial decree and publication in the Staatsblad or Staatscourant (Government Gazette, in Dutch). This means that the dates or information mentioned in this article may still change.