Other measures

More flexible setting of interest on tax

The proposed change aims to make it possible to set interest on tax rates more flexibly in future. If the rate of interest on tax to be reimbursed should be different from the rate of interest on tax to be charged, this will no longer require any change in the law, and a general administrative measure will suffice.  

Extension of the penalty period for third parties

The penalty period for third parties, such as consultants and accomplices, will be extended to 12 years if the taxpayer concerned is also subject to an additional tax assessment period or an extended time limit for making an additional assessment. This will prevent the third parties involved from being fined, whereas the taxpayer can still be dealt with within the extended time limit. For existing cases, transitional law will apply.

Compensation of costs for WOZ and BPM objections

In order to discourage the earnings model of ‘no-cure-no-pay agencies’, payment of the costs of proceedings for objections to the immovable property valuation assessment (Wet waardering onroerende zaken, WOZ) and private motor vehicle and motorcycle tax (BPM) was reduced to 25% as from 1 January 2024. The Supreme Court ruled that the low tariff for payment of the costs of proceedings in tax and contribution cases should remain outside the scope of application. As a result, the tariff for other matters applies and such tariff is currently twice as high. In order to bring the level of compensation in line with the legislator’s intention, it is proposed to reduce the payment of the costs of proceedings for WOZ and BPM cases to 12.5%.

Refund without tax return form

The government will introduce a legislative proposal to determine an income tax assessment for taxpayers who have failed to submit their tax returns, even through their income tax assessment shows an amount of zero or a tax refund. This is in the interests of citizens who do not respond to requests to submit a tax return, while there is a right to a tax refund.

Take note!

It is always a good idea to respond in good time to a request to submit a tax return.

Interest on overdue tax for loss setoff

A tax assessment must be paid within the applicable deadline. Where that deadline is exceeded, interest on overdue tax will be charged. A change in the law erroneously deleted a scheme in 2013. This cancelled the legal basis to recalculate the interest on overdue tax when loss setoff is applied. This scheme is now being reintroduced into the law, so that the scheme corresponds again to the situation prior to 2013. This amendment is only expected to enter into force as of 1 January 2027 due to the necessary change in the automation system.

Take note!

For many years after loss setoff, the Tax Administration erroneously did not recalculate the interest on overdue tax. In 2021, the Tax Administration launched a recovery action to rectify this situation.

Child-related budget increase

In order to improve the financial position of families in a targeted manner, the government is increasing the amount for a child in the child-related budget. In addition, the phase-out percentage is raised incrementally each year to make the child-related budget more targeted.

Housing benefit simplification

The housing benefit is being simplified, so that the housing benefit will only distinguish between single-person households and multi-person households. In addition, the income-dependent scale down of the housing benefit is being simplified. Recipients of housing benefits will be able to better assess the impact of a higher income, and marginal pressures will decline for most recipients of housing benefits. In 2026, the own contribution will be reduced.

No reduction of social security payments

The planned incremental reduction of a number of minimum social security benefits will be paused over the next three years (2025, 2026 and 2027). As a result, these benefit payments will be higher than they would have been without this proposal until the end of 2038.  This concerns the social assistance benefit, survivors’ benefits, and supplemental allowance up to the level of the social minimum for single persons on UWV (Employee Insurance Agency) benefits.

Take note!

This does not concern an increase in benefits, but the cancellation of a proposed reduction.

Unjustified rejection of debt settlement

From 2012 to March 2021, requests by citizens for cooperation in an amicable out-of-court debt restructuring for natural persons (minnelijke schuldsanering natuurlijke personen, MSNP requests) were rejected by the Tax Administration for one reason. It should not have happened that the Tax Administration only rejected MSNP requests (automated) for one reason. This concerns vulnerable citizens, for whom the possibility of achieving a debt-free start was unjustifiably limited.

It is for this reason that a legislative proposal is being drafted in which the government introduces a basis for the concessionary scheme policy designed to meet the needs of the citizens concerned.

Remission profits and allowances

On remission of a business debt, the entrepreneur will have a profit. For income tax purposes, that profit is exempt, or the profit is offset against deductible losses. For allowances, however, no account is taken of deductible losses. In this situation, remission may result in either no entitlement or a lower entitlement to allowances, which is undesirable. In such situations, therefore, at the taxpayer’s request, the benefits do not take remission profits into account which are not fully exempted from income tax due to losses to be offset.

Take note!

This is a specific scheme and does not mean that other income on paper can also be disregarded for the allowances.

Tightened property measure for fiscal investment institutions (FIIs)

The 2025 Tax Plan contains a measure taken to ensure that a fiscal investment institution (FII) can no longer invest directly in Dutch property: the property measure. If an FII does invest directly in Dutch property from 1 January 2025 onwards, the FII cannot apply the special corporation tax regime for FIIs. This measure will be followed by further adjustments to plug a leak and to give substance to the concept of “property”. The precise amendment proposals are not yet known at this time.

Tip

Ensure the FII complies in good time with the new property investment rules to prevent loss of the FIIs favourable corporation tax rate.

Tax treatment of foreign legal forms

The tax treatment will change not only for various foreign legal forms, but also for a number of Dutch legal forms. This means, for example, a discontinuation of the independent liability for tax for the open limited partnership and similar partnerships. Some refinements are now being made to this legislative proposal. For example, introducing the change in the tax treatment of various legal forms has unintentionally limited the scope of the restriction on deductibility for the allocation and issuance of shares and option rights within a group of companies. These types of omissions are now being adjusted.

Tip

In principle, the loss of corporation tax liability of an open limited partnership, for example, leads to a tax settlement. But with certain means, e.g. a facilitated share merger, the tax claim can be deferred.

BACK TO BUDGET DAY SPECIAL 2024