Budget Day 2022: SME companies
On Budget Day 2022, the plans for the coming year were officially announced. Mazars has listed the most important (tax) proposals from the 2023 tax package. What will change for you?
Measures international business
As of 1 January 2023, the first corporate income tax bracket will be lowered from €395,000 to €200,000. As a result, companies will reach the higher tax rate sooner.
Furthermore, the lower corporate income tax rate of 15% which applies for the first bracket will increase to 19%. The government has indicated to evaluate the corporate income tax rates in FY2024.
Beside the fact that the aforementioned amendments will trigger a direct cashflow impact, these amendments could also result in a revaluation of the deferred tax position in the annual accounts for IFRS or Dutch GAAP purposes.
Currently, when paying a provisional corporate income tax assessment in one lump sum, the taxpayer can in certain cases receive a payment discount. Earlier this year, the Dutch government indicated its intention to abolish this rule with effect from 1 January 2023. Although this was not included in the Tax Plan 2023, it is expected that the payment discount will no longer be applicable as of 1 January 2023.
The Dutch government has indicated that it will make a number of technical improvements to the Dividend Tax Act 1965. These include amongst others:
Like the abolition of the payment discount, the expected effective date of these technical improvements in the Dividend Tax Act 1965 is 1 January 2023.
The DAC7 bill was sent to the House of Representatives last spring and is still in process. This bill concerns the automatic exchange of information for operators of digital platforms. As of 1 January 2023, European digital platforms will be obliged to report the income from products and services on their digital platforms to the tax authorities. National tax authorities will be obliged to automatically share this information with the other EU Member States. DAC7 must be implemented in the Netherlands and the other EU Member States by 31 December 2022 at the latest. From 2024, digital platforms will have to report for the year 2023 for the first time.
The intended adjustments to the Dutch tax qualification policy for (foreign) legal entities were initially planned to be part of the previous Tax Plan (2022). However, after the consultation the State Secretary has indicated that this proposal will be postponed to the second half of 2023.
The European Commission has published the ATAD3 proposal on 22 December 2021, which aims to combat abuse by so-called shell entities. Since ATAD3 has an assessment period of two years, ATAD3 could already have consequences should it be introduced on the proposed date, 1 January 2024 (or even 1 January 2025).
Currently, the ATAD3 proposal is still under discussion.
At the ‘June 2022 Ecofin’ the implementation of Pillar 2 was not agreed upon by the European Council (1 of the 27 EU Member States has not expressed its willingness to implement Pillar 2 at this stage). However, based on a joint statement, France, Germany, Spain, Italy and the Netherlands are committed to enact the global minimum effective taxation in 2024 by any possible legal means even if the EU Member States will not unanimously agree upon the implementation of Pillar 2.
The EU has published a directive on public country-by-country reporting ('Public CbCR'). The directive obligates companies with a consolidated worldwide turnover of at least €750 million in the previous year to disclose a statement that includes, amongst others, total profits and taxes paid. The directive must be implemented in national law on 22 June 2023 at the latest. However, the effective date of the obligation commences for financial years starting on or after 22 June 2024.
Currently, the general real estate transfer tax currently is 8%. Based on the Tax Plan 2023, this tax rate will increase to 10.4%. This tax rate would apply for non-residential properties and acquisition of residential properties by legal entities and private individuals that do not intend a long-term living in these residential properties.
As of 1 January 2024 the government intends to introduce a measure in the Dutch Corporate Income Tax Act on the basis of which fiscal investment institutions are no longer allowed to invest directly in real estate.
As a result of this measure, the profits of fiscal investment institutions investing in real estate will be taxed at the normal corporate income tax rates rather than the 0% tax rate applicable for fiscal investment institutions.
Would you like to know more about the Tax Plan 2023, the proposed changes and what this means for you? Please contact Erik Stroeve by e-mail or by phone: +31 (0)6 51 24 45 30 or Devi Joshi by e-mail or by phone: +31 (0)6 49 10 06 22. They are happy to further help you.
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