September, 2022 – The Netherlands – Certa Advocaten
This is a “historic” purchasing power package, in which the measures add up to over 17 billion euros. Households will have 3.9 per cent more to spend next year. This is a repair because purchasing power is declining almost 7 per cent this year.
In 2023, the Dutch government does relatively little to benefit entrepreneurs (small and medium-sized enterprises).
- The government is encouraging entrepreneurs to offer employees higher salaries and better working conditions to solve labour market tightness and mitigate the painful effects of high inflation. The government seems to overlook the fact that due to the corona pandemic, entrepreneurs’ reserves are already low and they too face higher prices, which they cannot always pass on to customers.
- Income tax in the first bracket will be reduced. In addition, the employment tax credit, a tax credit for working people, will go up by EUR 500 million. In this way, employees benefit, making work more attractive.
- The government lowers the profit limit for the low corporate income tax rate from € 395,000 to € 200,000. As a result, companies are more likely to pay the high rate of 25.8%. The low rate of 15% goes up to 19%. By making more companies pay more tax, the government wants to raise more money to reduce the burden on citizens.
- The self-employed deduction, a tax benefit for self-employed people, will be phased out more fast. Next year, this will yield EUR 170 million.
- Eliminate old-age savings. From 1 January 2023, the old-age savings cannot be built up further, the current accumulated reservations can be paid out (on which tax is paid) or converted into an annuity product.
Public administration and environmental law
- Climate law. to meet the climate targets, an acceleration of emission reduction is necessary. The government is working on a proposal to lay this down in the Climate Act. The target of 95% reduction by 2050 will be tightened to an obligation for the Netherlands to reduce net greenhouse gas emissions to zero by 2050.
- Incentives sustainability built environment. To meet the targets for the built environment, the government introduces subsidy schemes for insulation, hybrid heat pumps, heat networks and other sustainable alternatives.
- Reducing nitrogen emissions. In the field of nitrogen, the government makes additional normative agreements so that the target range is improved.
- For management, maintenance, replacement and renovation (preservation) of national infrastructure, an extra €390 million will be added in 2023. These funds will contribute to the accessibility, safety and quality of life in the Netherlands.
- Corona grants. Corona-related expenditure will remain in 2023. In total, over €5.2 billion in spending is estimated. This expenditure is mainly for combating the spread of the corona virus. Generic measures such as the Emergency Measure Bridging Employment (NOW) and Fixed Costs Allowance (TVL) have ended.
The Dutch government emphasises that the effects of high inflation have the greatest impact on Dutch employees. To make working more rewarding and build towards a future-proof labour market, the government is taking the following measures:
- The minimum wage will be increased by 10 percent, also resulting in substantial increase in benefit payments.
- The Dutch government wants to improve the position of flex-employees in temporary contracts, on-call employees and agency employees. These contracts are currently often drafted in favour of the employer.
- The employment tax allowance (a tax allowance for employees) will increase with EUR 500 million, this way Dutch employees will benefit, making working more attractive.
Real Estate and Lease
In his speech the King addressed the pressing housing market: “A good and affordable house to buy or rent is out of reach for more and more people, especially for first-time buyers and young people.” The Dutch government will commit to better affordable housing by 2023.
- Housing. For middle-income earners, the availability for affordable housing will be improved. The government does this by regulating the (initial) rental prices of middle-income rental homes and by making it easier to find a suitable affordable owner-occupied home. The government also wants to improve affordability in the social rented sector and ensure that households have a rented house that is suitable for their requirements.
- Renters with an income at or below 120% of the minimum income benchmarks from the rent allowance will receive a statutory one-off rent reduction of up to 550 euro (price level 2020). The government is simplifying the rent allowance and taking steps towards a better and simpler support system in place of the rent allowance.
- Landlord levy abolished. This year, the landlord levy will be abolished to increase the investment capacity of housing associations. These agreements should accelerate new construction of social housing, make existing housing more sustainable and improve affordability.
Please feel free to contact us if you have any questions.
CERTA, because you want progress.