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The Ministry of Finance has overview<\/a> published the key changes to taxation for 2018.<\/p>\n The bills setting out the tax plans for 2018 were passed by the Senate just before the Christmas recess. We outlined these proposals in our article Tax Plans for 2018<\/a>.<\/p>\n In the House of Representatives, the new rules on inheritance and gift tax relating to marriage had already been removed from the plans following the adoption of a motion. Instead, we are awaiting approval from State Secretary Snel to confirm that a 50\/50 division will never result in inheritance or gift tax being levied.<\/p>\n Do not confuse the measures in the 2018 tax plans with the plans set out in the Rutte III\u2019s coalition agreement<\/a>. The coalition agreement is still to be translated into draft legislation in 2018 (and in subsequent years).<\/p>\n The most significant changes to income tax relate to Box 3. The tax-free allowance has been increased from \u20ac25,000 to \u20ac30,000 per taxpayer (for tax partners, the tax-free allowance is therefore \u20ac60,000). This increase has implications for rental and healthcare allowance<\/a>.<\/p>\n In addition, the flat-rate return will be reduced slightly. For assets of up to \u20ac70,800 in Box 3 (above the tax-free allowance), the flat-rate return is 2.02%. The tax (30%) therefore amounts to 0.6% of the assets. This is still considerably higher than the interest rate on a savings account. If you compare the tax against an interest rate of 0.1%, the rate works out at 600%.<\/p>\n Even for the portion of assets exceeding \u20ac978,000, the flat-rate return decreases: from 5.39% to 5.38%.<\/p>\n It is still possible to avoid Box 3 taxation via a private limited company, an open-ended mutual fund or an open-ended limited partnership. But you must do so before the end of the year have arranged<\/a>.<\/p>\n The most talked-about change concerns the abolition of the Hillen allowance. However, this will not come into effect until 2019. For 2018, the additional tax liability percentages for owner-occupied homes have been reduced slightly:<\/p>\nTax Plans for 2018<\/h4>\n
Income from savings and investments (Box 3)<\/h4>\n
Own home<\/h4>\n
WOZ value<\/strong><\/td>\n| Addition<\/strong><\/td>\n<\/tr>\n | more than<\/strong><\/td>\n | but no more than<\/strong><\/td>\n | 2018<\/strong><\/td>\n | 2017<\/strong><\/td>\n<\/tr>\n | -<\/td>\n | \u20ac 12.500<\/td>\n | nothing<\/td>\n | nothing<\/td>\n<\/tr>\n | \u20ac 12.500<\/td>\n | \u20ac 25.000<\/td>\n | 0,25%<\/td>\n | 0,30%<\/td>\n<\/tr>\n | \u20ac 25.000<\/td>\n | \u20ac 50.000<\/td>\n | 0,40%<\/td>\n | 0,45%<\/td>\n<\/tr>\n | \u20ac 50.000<\/td>\n | \u20ac 750.000<\/td>\n | 0,55%<\/td>\n | 0,60%<\/td>\n<\/tr>\n | \u20ac 75.000<\/td>\n | \u20ac 1.060.000<\/td>\n | 0,70%<\/td>\n | 0,75%<\/td>\n<\/tr>\n | \u20ac 1.060.000<\/td>\n | -<\/td>\n | 2,35%<\/td>\n | 2,35%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n | For properties with a WOZ value exceeding \u20ac1,060,000, the additional tax liability of 2.35% applies to the value in excess of \u20ac1,060,000.<\/p>\n If you claim the mortgage interest deduction on your own home in the highest tax bracket, a further 0.5% percentage point will be deducted from that in 2018. You will claim the deduction in 2018 at a rate of 49.5% (compared with 50% in 2017). Following the introduction of the measures provided for in the coalition agreement, flat-rate tax<\/a> this will be phased out more quickly to the low rate of that flat-rate tax (36.93%).<\/p>\n
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