New 2023 Dutch corporate tax rates announced. If you ever had the idea the Netherlands is a tax heaven, this will definitely kill that idea.
New 2023 Dutch corporate tax rates announced
The Dutch Government always announces on the third Tuesday of September the plans for the next year. Now 2023. This year you could not actually accuse the Government of announcing a plan. A plan would be a thought through operation. This is not a plan, more increase of revenue to compensate all the current Energy market issue. Maybe understandable, but it does label the Dutch Government as unpredictable with respect to tax rates. Which is not good for attracting companies from abroad.
The rate is as follows: the profit made from zero to EUR 200.000 is taxed at 19% corporate income tax. The profit exceeding EUR 200.000 is taxed at 25,8% corporate income tax.
Old 2022 Dutch corporate tax rate
The current corporate tax rate is much better. That is 15% over the profit from zero to EUR 395.000. Then 25,8% over the excess profit. Most companies are under the EUR 395.000 profit, hence this is a good tax rate. A tax rate a foreign company may decide to land in the Netherlands.
If you are the shareholder employee of your Dutch BV company, you could decide to take out a higher salary. A higher salary reduces the profit. Often internationals have the so called 30% ruling. This implies 30% of your salary is exempted from taxation. The higher salary only does a marginal pain, in relation with paying less corporate income tax.
The new 2023 tax rates announced make the 30% ruling a 30% ruling till EUR 216.000 salary rule. This implies the 30% ruling is applicable till a salary of EUR 216.000. The excess salary above EUR 216.000 will be without the 30% ruling impact.
For most regular Dutch employees EUR 216.000 is a good enough salary. We understand that if you are the risk taker in the company, that your reward could be higher. But more 30% ruling for the salary exceeding EUR 216.000.
You digest the above and you come to terms that you cannot increase your salary too much to decrease the taxable profit. The profit will be taxed a taxed at a higher rate. Fortunately you can enjoy the divided.
News flash for you. The dividend tax has been adjusted as well. Till the end of this year the rate is 26,9% over the dividend you earn in total. That changes into two brackets. One bracket till EUR 67.000 is taxed at 24,5% dividend tax in total. The excess is taxed at 31% dividend income tax in total.
I need to add ‘in total’. The company pays 15% up front. The balance to the total percentage is settled while the income tax return is filed, in Box 2. This implies with the new dividend withholding tax rates you need to think what you do, make some calculations. More simple is has not become.
Tax is exciting
We think tax is exciting. Not excited we are about the 2023 rates. In the current climate with the war in Ukraine, energy issues and other compensations done by our Government, it is explainable, not exciting.