What is Prinsjesdag? 👑📅
During Prinsjesdag (the third Tuesday of September), King Willem-Alexander reads out a speech called Troonrede. The Troonrede describes how things are going in the Netherlands and the government’s major plans for the coming year. The Finance Minister then hands over the TweedeKamer Miljoenennota and the Rijksbegroting to the President. These documents include details on the implementation of the government’s plans and the amounts allocated for each. Miljoenennota, Rijksbegroting, Belastingplan and other official Prinsjesdag documents can be found at https://www.rijksoverheid.nl/onderwerpen/prinsjesdag
1. New tax rates: 📊💸
What is changing?
Are you an entrepreneur for income tax purposes? In 2025, tax rates and thresholds will change. There will be three thresholds, each of which will have its own rate. This will allow you to keep more of your income from the first threshold. The employee tax credit will also increase, while the general tax credit (AHK) will be reduced.
Tax rates
Here are the tax rates that will apply in 2025 if you are younger than the AOW retirement age:
– tax rate in threshold 1: 35.82%
– tax rate in threshold 2: 37.48%
– tax rate in threshold 3: 49.50%
New tax thresholds
Here are the income thresholds for each rate in 2025:
– Threshold 1: income up to € 38,441
– Threshold 2: income from € 38,441 to € 76,817
– Threshold 3: income above € 76,817
Increase in employee relief (arbeidskorting)
The employee tax credit will increase in 2025 to a maximum of €5,599 (in 2024 it was €5,532). The amount of the employee deduction depends on taxable income. Starting at €43,071, the amount that can be deducted will begin to decrease.
Reduction of the general tax credit (Algemeneheffingskorting)
The general tax credit (AHK) will be reduced by €335. In 2025, the maximum AHK will be €3,027 (in 2024 it was €3,362). The maximum deduction applies to those with a minimum income. The AHK decreases as income increases above the minimum.
The government wants these changes to allow citizens and businesses with middle incomes to have more resources.
For whom?
– self-employed
– SMEs with sole proprietorships or partnerships (vof)
When?
The changes will most likely go into effect on January 1, 2025.
Note: The effective date of these (statutory) changes is not yet final. The proposed law must first be approved by the House of Representatives and the Senate. Only after publication in Staatsblad or Staatscourant can the law go into effect.
2. reduction of MKB relief to 12.70% in 2025 📉🏢
What is changing?
Are you a self-employed or SME entrepreneur? And are you an entrepreneur for income tax purposes? The MKB (small and medium-sized business tax credit) will be reduced in 2025. In 2025, you can deduct 12.70% of the MKB allowance from your income. In 2024, it was 13.31%. As a result, you will pay a higher tax on your income starting in 2025.
For whom?
Self-employed and entrepreneurs in the SME sector who pay income tax, and therefore carry out unincorporated business activities (for example, sole proprietorship, vof, partnership).
When?
The changes will most likely go into effect on January 1, 2025.
Note: The effective date of these (statutory) changes is not yet final. The proposed law must first be approved by the House of Representatives and the Senate. Only after publication in Staatsblad or Staatscourant can the law go into effect.
3. elimination of low-income relief(LIV) in 2025 ⚖️❌
What is changing?
Do you have an employee who qualifies for the Low Income Tax Credit (LIV)? As of January 1, 2025, LIV will be eliminated. This means that you will no longer receive subsidies for salary costs.
An LIV-eligible employee works at least 1,248 hours per year and has an average hourly wage between 100% and 125% of the minimum wage.
Note: As of January 1, 2024, the upper limit of the average hourly wage was reduced from 125% to 104%.
For whom?
Entrepreneurs with employees.
When?
The change will most likely go into effect on January 1, 2025.
Note: The effective date of these (statutory) amendments is not yet final. Entry into force depends on approval by the House of Representatives and the Senate or promulgation of a general administrative regulation (AMvB) or ministerial regulation and publication in Staatsblad or Staatscourant.
4. no wage cost relief (LKV)for older workers 👵👴
What is changing?
Are you an employer? And do you employ or plan to employ an employee age 56 or older? As of January 1, 2026, you will no longer be eligible for the wage cost allowance (LKV). This applies to employees who started working for you on or after January 1, 2024. For employees hired before January 1, 2024, the wage cost relief will still apply.
LKV is an annual relief for employers who hire workers who are having difficulty finding jobs.
Note: Effective January 1, 2025, LKV amounts for older workers will be reduced from €3.05 per hour (maximum €6,000 per year) to €1.35 per hour (maximum €2,600 per year). This applies to hours worked, including vacation hours and hours paid during illness.
For whom?
Employers employing individuals 56 years of age and older who meet LKV conditions.
When?
The change will most likely go into effect on January 1, 2026.
Note: The effective date of these (statutory) amendments is not yet final. Entry into force depends on approval by the House of Representatives and the Senate or promulgation of a general administrative regulation (AMvB) or ministerial regulation and publication in Staatsblad or Staatscourant.
5. VAT on culture, books and sports rises to 21% 🎨📚🏋️
What is changing?
Are you an entrepreneur in the cultural sector? Do you create art, sell books or organize concerts? Or do you operate in the sports sector, running a gym or offering other commercial sports activities? The VAT rate for culture, books and sports will increase from 9% to 21%.
The VAT increase will cover, among other things:
– Books, e-books, newspapers, magazines and their lending,
– concerts, music festivals, theater performances, cabaret, dance and musicals,
– Commercial sports activities, such as gyms (fitness clubs), ski slopes, ice rinks, sports activities on site,
– Admission to sports competitions (including those organized by non-commercial sports clubs),
– public museums.
The VAT rate of 9% will continue to apply to cinemas, amusement parks, playgrounds, ornamental gardens, circuses, amusement parks, zoos and non-commercial sports clubs. The government wants this change in VAT rates to increase tax revenues and simplify the tax system.
VAT rate of 21% also applies to upfront payments
If a theatrical performance is prepaid on November 3, 2025 through ticket purchase, but the performance does not take place until January 2, 2026, the 21% VAT rate applies.
For whom?
Entrepreneurs operating in the cultural, book and sports sectors.
When?
The VAT increase will most likely go into effect on January 1, 2026.
Note: The effective date of this (statutory) amendment is not yet final. The proposed law must first be approved by the House of Representatives and the Senate. Only after publication in Staatsblad or Staatscourant can the law go into effect.
6. VAT on accommodation increases from 9% to 21% 🏨💤
What is changing?
Do you offer overnight accommodation (lodging)? The VAT rate for overnight stays will increase from 9% to 21%.
A VAT rate of 21% will apply to short-term accommodation, such as:
– hotels,
– vacation homes,
– bed and breakfast (B&B) guesthouses,
– pensions,
– hostels,
– Accommodation rented through platforms,
– furnished caravans.
The VAT rate for camping remains at 9%.
The government is planning this VAT rate increase to increase tax revenues.
For whom?
Owners of facilities offering short-term accommodation.
When?
The change will likely take effect on January 1, 2026. The 21% VAT rate will also apply to prepayments and reservations made before January 1, 2026. For example, if a reservation is made in November 2025, but the guest does not stay at the hotel until February 2026, the 21% VAT rate will apply.
Note: The effective date of this (statutory) amendment is not yet final. The proposed law must first be approved by the House of Representatives and the Senate. Only after publication in Staatsblad or Staatscourant can the law go into effect.
7. road tax rebate for zero-emission cars until the end of 2029 🚗⚡
What is changing?
Do you drive an electric passenger car? The road tax rebate (motorrijtuigenbelasting, or MRB) will also apply after 2025 and last until the end of 2029. The discount applies to new and used zero-emission passenger cars, such as electric cars and those running on hydrogen.
– In 2024, you won’t pay road tax for a zero-emission car.
– In 2025, the road tax will be 25% of the normal rate for zero-emission cars.
– From 2026 to the end of 2029, there is a 25% road tax rebate for zero-emission cars.
– In 2030, there will be no more discounts, and you will pay the full road tax rate for a zero-emission car.
The government wants as many people as possible to choose vehicles that do not emit harmful substances. The discount is intended to ensure that owners of electric cars do not pay higher road taxes than owners of similar fossil-fuel vehicles. The amount of the MRB depends on the weight of the vehicle, and electric cars are heavier than gasoline cars because of the battery.
No discounts for electric commercial vehicles and plug-in hybrids after 2025
After 2025, the discount will not extend to electric delivery vehicles and other zero-emission vehicles or plug-in hybrids. The road tax discount for electric delivery vehicles (75%) and plug-in hybrids (25%) will continue to apply in 2025.
For whom?
Entrepreneurs owning or planning to purchase an electric passenger car.
When?
The changes will most likely go into effect on January 1, 2025.
Note: The effective date of this (statutory) amendment is not yet final. The proposed law must first be approved by the House of Representatives and the Senate. Only after publication in Staatsblad or Staatscourant can the law go into effect.
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Prinsjesdag2024 | Ondernemersplein