Netherlands: Payroll tax measures in 2023 Tax Plan

The proposals generally are intended to be effective 1 January 2023.

The proposals generally are intended to be effective 1 January 2023.

The 2023 Tax Plan package, presented to the lower house on “Budget Day” (20 September 2022), includes proposed changes with regard to payroll tax and social security contributions. The proposals generally are intended to be effective 1 January 2023, unless otherwise noted.

Under the 2023 Tax Plan, the tax rate in the first bracket would be reduced by 0.14%; the top rate of 49.50% applicable in 2022 would remain unchanged in 2023. The maximum general tax credit would be increased by €182 to €3,070 compared to 2022, and the maximum labor tax credit would be €5,052 in 2023.

Other payroll tax-related changes announced in the 2023 Tax Plan package concern:

  • Limited use of 30% ruling for salaries above €216,000 as of 2024
  • Repeal of efficiency margin in normative salary scheme
  • Lower normative salary for innovative start-ups
  • Fixed exemption for the first €400,000 of the payroll for tax purposes set at 1.92% (fixed exemption for the payroll above that amount remains at 1.18%)
  • Untaxed kilometer allowance increases to €0.21 per km in 2023 and to €0.22 km as of 2024
  • Codification of using compulsory retirement provision to purchase an annuity after the commencement date

Read a September 2022 report prepared by the KPMG member firm in the Netherlands


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