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The Senate has approved the bills containing the 2020 Tax Plans. Following this, the Ministry of Finance has published the overview Key changes to taxation for 2020<\/a> published (this overview is also known as the end-of-year press release<\/strong>).<\/p>\n Not exactly thrilling<\/strong><\/p>\n It comes as no surprise that the bills have been passed by Parliament. And we have already pointed out that the proposals are not all that exciting.<\/p>\n In our article Our hearts beat with anticipation<\/a> It states that the (final) legislative proposals concerning the current account measure and the changes to Box 3 will not be published until 2020.<\/p>\n Rates and exemptions<\/strong><\/p>\n The end-of-year press release contains a handy overview of most of the rates, exemptions, standard amounts, thresholds and so on applicable for 2020. Where these are index-linked, the so-called table adjustment factor of 1.016 has been applied. The amount applicable for 2019, multiplied by 1.016 (rounded off), gives the amount applicable for 2020.<\/p>\n A two-band tax rate is being introduced for income tax in Box 1. Income from employment and property (i.e. Box 1) up to \u20ac68,507 is taxed at a rate of 37.35%, and the amount above that at 49.5%. For those receiving the state pension (AOW), the first tax bracket will be split in two. Income up to \u20ac34,712 will be taxed at 19.45%, and income up to \u20ac68,507 will be taxed at 37.35%.<\/p>\n The rate at which tax-deductible items in Box 1 may be claimed is capped at 46% in 2020. Tax-deductible items include interest on a owner-occupied home, gifts, maintenance payments and the business expense allowance.<\/p>\n The rate in Box 2 (income from a substantial interest) will be increased from 25% in 2019 to 26.25% in 2020 (in 2021, this rate will be 26.9%). The rate in box 3 (income from savings and investments) remains at 30%. The tax-free allowance in box 3 will be increased from \u20ac30,360 to \u20ac30,846 (per tax partner).<\/p>\n Donate<\/strong><\/p>\n A common tax-related question around the turn of the year is: \u201cHow much can I gift to my children?\u201d. The answer is, of course: as much as you like, but the (standard) tax-free allowance for 2020 is: \u20ac 5.515<\/strong> (2019: \u20ac5,428). For the other thresholds, please refer to our updated factsheet Gift tax exemptions<\/a>.<\/p>\n