A new year means a new income tax return. Many people have to submit that 2023 return to the Tax Administration before 1 May 2024. We list some points of interest for you.
Postponement
The Inland Revenue needs some time to collect all the data for the pre-completed return (VIA). Therefore, it will only be possible to file income tax returns 2023 from 1 March 2024.
Postponement for filing the return is of course possible. You must then submit a request for this to the tax authorities before 1 May 2024. The tax return must then be filed before 1 September 2024.
Tax consultants may file their clients' returns staggered over the year, as long as the Tax Administration receives the 2023 return before May 1, 2025.
If you pay additional tax on your return, filing the return after 1 May 2024 has the disadvantage that the Tax Administration charges tax interest. This interest period starts for 2023 returns on 1 July 2024. The interest rate is not bad: 7.5% annually. You can limit the interest due by paying the expected tax in advance on a provisional assessment to be filed before 1 July 2024. However, you have to ask the tax authorities for this in time.
Business profit
With effect from 2023, the (tax) retirement reserve has been abolished. Old-age reserves existing on 31 December 2002 may be settled in accordance with the old rules. But no more allocations may be made.
The self-employed deduction has been reduced to €5,030. In the coming years, this deduction will be further reduced (to a deduction of only €900 in 2027).
The maximum amount to be charged to profit for business travel expenses by the entrepreneur's private car has been increased to €0.21 per kilometre.
When calculating profit, certain new business assets acquired or generated in 2023 can be depreciated at random. A maximum of 50% of the depreciation potential of these assets may be depreciated at random.
Deduction of annuity deposits/premiums
In 2023, the scope for deducting the deposit or premium for an annuity as an income-provision expense has been significantly widened. See our article More room to save for old age. Only premiums/insertions actually paid in 2023 may be deducted in the annual and/or reserve margin in 2023.
Excessive borrowing
DMSs who have a total of more than €700,000 + the taxable owner-occupied home debt with their BV(s) on 31 December 2023 will pay substantial interest tax (box 2) on the excess.
Box 3 (savings and investments)
Savings and investment income (box 3) in 2023 will only be calculated based on the lump-sum savings variant. In 2022, either the statutory rule or the flat-rate savings variant was still applied, depending on which resulted in the least tax.
In view of the introduction of the flat-rate savings variant, rules have been introduced to prevent reference date arbitrage. However, these rules will only become effective from 1 January 2024.
The flat rate of return on other assets for 2023 is: 6.17%. The flat returns for bank deposits and for debt will be finalised soon (expected to be around 1% for bank deposits and around 2.5% for debt).
The share in the reserve of an association of owners (VvE) and a balance in a third-party money account (e.g. with a notary) qualifies as a bank deposit from 2023. For 2022 and earlier years, it does not because that question is before the courts.
The rate in Box 3 has been increased from 31% in 2022 to 32% in 2023.
Whether the flat-rate determination of income from savings and investments is in line with EU law is still under tax court. More clarity on this is likely to emerge during 2024.
The void value ratio table has been updated with effect from 2023. As a result, there are far fewer cases where the value is lower than the WOZ value.
Claims between tax partners, as well as claims between parents and minor children, will be defiscalised from 2023. Under the flat-rate return calculation system used until 2022, these claims and debts were netted, which meant they did not lead to taxable income from savings and investments.
Finally, the calculation of double taxation relief in respect of foreign assets has changed from 2023.
Donations
From 2023, the deduction of periodic gifts is capped at €250,000 per calendar year. See our article Ceiling for deduction of periodic gifts.
Averaging
The averaging scheme has been abolished with effect from 2023. Under the transitional law, the 2022 - 2024 period is the last one that can be averaged. Of course, a year may only be averaged once.
In 2023, the so-called base-reducing items (entrepreneur's deduction, SME exemption, TBS exemption, owner-occupied home deduction and personal deduction) will only continue to be deductible at the rate of the lowest bracket at which income from work and home is taxed (which in 2023 runs up to an income of €73,031). The year 2022 was the last phase-out year for this measure. In 2022, these deductions, to the extent they fell in the highest rate bracket, were still deductible at 40%. In 2023, that is the rate of the lowest bracket: 36.93% (the rate adjustment in 2023 is therefore: 49.5% -/- 36.93% = 12.57%).