Supplementary pension: new tax laws
From 2014 onwards, 67 will be the age for supplementary pension accumulation under good fiscal conditions.
Preparation Under examination Accepted In force
The Upper and Lower Chamber have accepted the proposal
The fiscally attractive percentage for supplementary pension accumulation will drop by 0.4%. People on an income of €100.000 or more won’t receive tax deduction when saving for extra pension.
Preparation Under examination Accepted In force
The proposal is being prepared by the cabinet
Excise duties on beer, wine, sherry, port and spirits will rise by 5.75% on 1 January 2014. In January 2015, excise duties on cigarettes (19 per packet) and tobacco (40 gr per packet) will rise by approximately € 0.09.
One-off benefit payment for low incomes
People on an income which is 110% of the social minimum will receive a one-off benefit payment by their local council in 2014. The benefit payment will be € 100 for couples, € 70 for singles and € 90 for single parents.
General tax credit will rise for lower incomes and drop for higher incomes
Every tax payer is entitled to general tax credit. This tax credit means you will have to pay less tax over your wages or other income. In 2013 the maximum tax credit amount was € 2001. This amount will rise with € 102 in 2014. For people on a higher income (€19.645 and more) tax credit will be reduced based on income. The maximum reduction in 2014 will be € 737. For incomes of approximately € 56.500, the tax credit in 2014 will be € 1366.
General tax credit payment for partners moderated
Currently, everyone paying taxes is entitled to general tax credit. This credit will disappear gradually for people on a higher income (see measures mentioned above). Both partners are entitled to tax credit. If the partner who earns the least has no or little income and therefore will not be using (all of) his or her tax credit, then he or she will still be able to receive (part of) it, under certain circumstances. In this way, the partner earning less will be less likely to work more hours. This is why, in order to promote labour participation, over a period of 15 years (starting in 2009) the general tax credit will gradually disappear. Payments will lessen by 6.67% (approx. € 140) annually. At first there will be two exceptions, families with children under the age of six and taxpayers born before 1 January 1972. Between 2012 and 2014 this exception for families with children under the age of six and taxpayers born between 1 January 1963 and 1 January 1972 will lessened faster by 13.34% (approx.. € 280) annually.
Lowering tax bracket 1 and tax bracket 2
In the budget accord of the cabinet consisting of D66, ChristenUnie, SGP and the coaltion parties it is agreed that the tariff of tax bracket one will be lowered in 2014. This could stimulate people to spend more. Furthermore, the tariff of bracket two will be lowered incidentally from 25% to 22%. On the short term this will yield cash flow. Later on this cash flow will dwindle. Tax bracket two handles substantial interest. In case of substantial interest a person owns a minimum of 5% of all stocks, shares or participation certificates of a corporation.
Extension of tax bracket three
The yield of the tax rebate on mortgage interest limitation will be returned through extending tax bracket three (income tax). If your income falls under the highest tax bracket (bracket four: income of approx. € 58.000 and up) then the extension of tax bracket three ensures that a larger part of your income is taxed using a lower percentage (42% instead of 52%).
Freezing tax brackets and general tax credit
Tax brackets and general tax credit will not be adjusted to price development (not index linked) in 2014. Usually, income limits and tax credit are adjusted to inflation annually. In 2014, this index link is not used causing people having to pay more taxes in many cases.
Adjustments to severance payment
Classifying your severance pay is a form of bank saving or bank investments. In bank saving or bank investments you are entitled to a tax advantage if you meet certain requirements. From 1 January 2014 onwards, it will be made possible to cash in existing severance payments (from banks, insurance companies or a stamrecht BV) in one go. Only 80% of the total amount will be taxed as income tax. People making use of this option will be better off financially.
The severance payment exemption for new severance payment schemes will be axed on 1 January 2014. This entails that the new severance payment the taxpayer receives from their employer will be taxed completely as income tax implementing the regular tariff for income tax. This will have a negative effect on the income because a high marginal tariff is usually calculated.
Broadening of Capital Gains Tax law
You have to pay tax over received gifts. The tax amount depends on the amount received and from whom you have received the gift. The cabinet is broadening the law on capital gains tax in order to donate tax-free. The exemption on housing property will be broadened temporarily (from 1/10/2013 until 1/1/2015). The one-off exemption for parents donating to their children will be raised from € 50.000 to € 100.000. Furthermore, people will be allowed to donate to whoever they please, not just their children. This means somebody may receive a one-off donation of up to € 100.000 from anybody. The recipient will have to use this amount for their own property.