The third Tuesday of September looked a little different this year due to the corona crisis, and so did the measures contained in the bill of millions. Read here what has been decided and what that means for your finances.
Not all changes mentioned in this article are final; some of the proposals still have to be voted on.
Income
- On average, we will improve slightly in the coming year. It is expected to be the median purchasing power will be 0.9 percent in 2021. Some of the households are therefore also in decline. Here you can read what happens to purchasing power for different households.
- The cabinet is earmarking money for tax reduction. The tax rate in the income tax decreased by 0.25 percentage point to 37.10 percent. As a result, almost everyone pays slightly less tax.
- Of general tax credit, a discount on income tax and national insurance contributions, will increase by 82 euros next year to support low incomes.
- From next year you can do more savings into your bank account without having to pay tax on it. The tax-free allowance in box 3 will increase to 50,000 euros per person. Now that is just over 30,000 euros.
- In addition, the disk boundaries are adjusted. As a result, the first disk runs from the tax-free capital up to 100,000 euros and the second installment up to a capital of 1 million euros. As a result of these measures, approximately one million people will pay less tax on box 3. The tax rate will increase slightly. That rate will increase from 30 percent to 31 percent.
Work
- The CPB believes that the unemployment in 2021 to 5.9 percent of the labor force. This means that there may be 546,000 Dutch people without a job. More than 400,000 people are currently looking for a job.
- Of employed person’s tax credit, a discount for workers on tax and national insurance contributions, will be increased by a maximum of 324 euros. People with an average income benefit most from this.
- Of self-employed person’s allowance, an exemption for entrepreneurs from income tax, will be phased out in steps of 110 euros extra per year, on top of the reduction of 250 euros per year that had already been agreed. Currently, the self-employed deduction is 7,030 euros and next year 6,670 euros.
- If working in healthcare more attractive, the cabinet will allocate 20 million euros next year. This should reduce the workload and reduce the administrative burden for healthcare staff. The wages of healthcare workers will not be increased, but they will receive an extra one-off next year ‘coronabonus‘of 500 euros. A total of 2.16 billion euros has been reserved for this.
Children
- It child-related budget from the third child within one family increases by 617 euros per child. In this way families with many children are supported. The cabinet is earmarking 150 million euros for this.
Elderly
- The median purchasing power development of pensioners is expected to be 0.5 percent next year.
- Of AOW benefit will be higher for all retirees in 2021. This is due to the higher general tax credit that applies to everyone (under the heading Income).
- People with a supplementary pension will have to wait and see whether it will be indexed in 2021, but as compensation the elderly person’s discount increased by 55 euros. This means that they have to pay less tax.
Care
- Of basic insurance will become more expensive in 2021. The monthly premium is expected to increase by about 5 euros. The exact increase is still unknown, because health insurers have yet to determine the premiums. These must be announced around mid-November.
- It own risk remains the same and will therefore also be 385 euros next year.
- It basic package is temporarily expanded to include the recovery care that is sometimes required after an infection with the corona virus. The extension will take effect on July 18, 2020 and will apply for at least one year. There are also some extensions that are separate from COVID-19.
- Of care allowance increases to a maximum of 1,294 euros per year for a single-person household. That is 44 euros more than now. For a multi-person household, the maximum annual amount increases by 99 euros to 2,496 euros.
Living
- Of tax on natural gas will increase by 3 cents per cubic meter. Not all households will notice these effects in their wallets, because everyone will receive 31 euros in energy tax back next year. That is why especially people with a poorly insulated house will be affected by this measure.
- Of transfer tax will be deleted for people between 18 and 35 years old who buy a house for the first time and are going to live in it themselves. People who buy a house without occupying it themselves – such as investors and parents who buy a house for a studying child – will not pay 6 percent but 8 percent transfer tax next year. The cabinet hopes that this will make it easier for starters on the housing market. From next year, people over 35 will pay 2 percent transfer tax for their own home.
- About 260,000 ‘expensive crooked residents’ (tenants of social housing who earn too little in proportion to be able to pay their rent) receive a one-off rent reduction. Their rent is reduced to the first capping limit. This means that they save an average of 40 euros per month per household.
- As previously announced, the highest rate for the mortgage interest deduction in 2021 by 3 percentage points to 43 percent. That rate continues to fall. The rate will be 40 percent in 2022 and 37.05 percent a year later.
Businesses
- There is a bill for the introduction of one CO2 tax for industry from 1 January. For example, the emission of CO2 must become more expensive than reducing it. The goal is to emit 14.3 megatonnes less CO2 in 2030 than in 2019.
- Taxation for multinationals must become “fairer”, the memorandum says. Thus, the rules for the Corporation tax (vpb) tightened. Among other things, the reduction of profit tax with losses abroad will be limited. As a result of this adjustment, companies annually spend 700 million euros more in taxes.
- Also the interest deduction for the vpb is contained. But first it must be investigated what is possible. In addition, only the low corporation tax rate will go down and the high rate will remain intact, while the plan was to reduce both.
- It small and medium-sized businesses (SMEs) will receive a tax reduction. These companies will have to pay less profit tax from 2021, because the first bracket of corporate tax will be increased in two steps from 200,000 to 400,000 euros. The rate will be reduced from 16.5 to 15 percent.
- Investments by companies are stimulated with the Job-Related Investment Discount (BIK), which will take effect in 2021. A percentage of the investments may be deducted from the payroll tax.
To travel
- Flying is expected to become more expensive by 2021. That’s because of the air passenger tax which is then entered. Exactly how much will be charged is not yet known.
- Of car taxes be adapted to stricter environmental requirements. For example, the conditions of the purchase tax bpm – which is linked to the CO2 emissions of the car – are being tightened.
To study
- The cabinet will deduct extra money for it in the 2021 budget Education from. Part of that money is intended for students who have been delayed in their final year of study due to the corona crisis. The amount that students can get back differs per situation.
- In order to make it easier for people to retrain, employers no longer pay wage tax training costs made after the termination of employment.
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