Tax reforms that will take effect in 2023

Tax Reforms 2023 Netherlands
Starting from January 2023, some rules in the tax system for workers and entrepreneurs in the Netherlands will change.

Income Tax (Box 1 – Income Tax Return)

The first bracket of income tax will be reduced from 37.07% to 36.93% for taxpayers with incomes up to €73,031. However, for those earning above this amount, the tax rate remains at 49.5%.

Investment Income Tax (Box 3 – Income Tax Return)

Savings up to €57,000 will not be taxed for individuals filing as single, and up to €114,000 for those filing as fiscal partners.

Minimum Wage

The minimum wage will increase by 10.15%, meaning the gross monthly salary will be €1,934.40 per month. The maximum severance pay in case of job loss will rise to €89,000.

Health Insurance and Subsidy

The Dutch health insurance subsidy will increase to €154 per month from January 1, 2023. Additionally, the minimum annual income requirement for the subsidy will increase to €520 gross annual salary for individuals or €48,224 for fiscal partners. Health insurance will see an increase of €10 per month for the basic insurance compared to 2022. The deductible (eigen risico) remains at €385. Therapies for individuals still suffering from COVID-19 effects will be included in the basic health insurance package until August 1, 2023. Vitamin D pills will no longer be covered by basic health insurance, but contraceptive pills are covered again.

Self-Employed Individuals

One of the good news is the reduction in the self-employed deduction, which will decrease from €6,310 to €5,030. Additionally, some measures will be taken to simplify the tax system for entrepreneurs and self-employed individuals.

Car and Travel

For company electric cars, the reduced tax rate of 16% will apply to vehicles with a catalog value of up to €30,000. Cars with a higher value will pay 22%. The tax-free travel allowance will increase from 19 cents to 21 cents per kilometer from January 1. For example, you can be reimbursed a higher amount (tax-free) for travel expenses. The airport tax will increase from €7.95 to €26.43 per plane ticket, a measure taken to encourage more train use and reduce CO2 emissions from flights. Train ticket costs will increase by 1.8% from January 1, 2023.

Housing

For private sector housing, rent can increase by a maximum of 4.1% in 2023. The rent increase for social housing from July 1, 2023, can be raised by: a maximum of 3.1% if the (basic) rent is €300 or more per month (this is equal to the average wage increase); a maximum of €25 if the (basic) rent is less than €300 per month. This is more than 3.1%. In this way, landlords can increase very low rents more quickly. And thus charge a rent that better matches the quality of the housing. This rent increase does not depend on your income. The rent increase applies if you rent an independent dwelling (single-family house, apartment, studio, bungalow, etc.).

Energy

Prices for gas and electricity have been fixed, and the discount on the energy tax, which was reduced in 2022, has been extended. However, the VAT rate for energy services has returned to its normal level of 21%.

Excise Taxes: Tobacco and Gasoline

From April 1, 2023, the excise tax on tobacco will increase. A pack of cigarettes will cost an average of €9 starting April 1, 2023. From April 1, 2023, the government has reduced the excise tax on fuel in response to the sharp increase in fuel prices. This measure will be extended until June 2023. Starting July 1, the excise tax will increase, with the excise tax on petrol at €0.789, diesel at €0.516, and LPG at €0.186.
Tax Reforms 2023 Netherlands

Source: Rijksoverheid, Business gov, Dutch news
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