United Tax Network – The smarter choice

United Tax Network – The Smarter Choice

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Letter from the government on Dutch tax reform in 2016

The Dutch Government has sent a letter to the Parliament regarding the intended tax reform in 2016. The main issues concerning individual income tax are summarized below.

  • Reduction of the tax rates under the second and third income tax brackets (currently 10.85% and 42% respectively) with approximately 2%.
  • Increase of the taxable amount for which the 52% rate will apply (currently as of Euro 57,585).
  • Reduction of the wage tax for employers hiring unemployed people who will earn a low salary.
  • Increase in the employment levy rebate, a tax credit that is deducted from the monthly wage tax in 12 monthly instalments.
  • Increase in the income-dependent combination rebate, a tax credit that may be granted to the spouse earning the lower income where both spouses are working and supporting children.
  • Dismantling of the general levy rebate.
  • Motor vehicle tax will be modified to promote the use of environmentally friendly cars.
  • Measures will be taken to prevent tax avoidance by directors and major shareholders.