Law changes for entrepreneurs as of Jan. 1, 2024
The beginning of the year is traditionally a time for tax and legislative changes. You may notice little of some changes, while others can have a big impact on your wallet.
We list the most important changes for you.
New income tax rate
Starting this year, you will pay slightly more tax on your income in Box 1. The tax rate for an income up to €75,518 has increased from 36.93 percent to 36.97 percent. The tax rate for an income above € 75,518 has not changed. On this you pay 49.50 percent tax.
Increase in untaxed travel reimbursement
As a business owner, you may deduct a certain travel allowance from profits for income tax purposes. Previously, the allowance was 21 cents per kilometer driven by a private car, bicycle, or motorcycle. As of Jan. 1, 2024, the untaxed mileage allowance will go up to 23 cents.
SME profit exemption drops
"The SME profit exemption drops from 14 percent to 13.31 percent. This exemption reduces your taxable profits. So because of the reduction in the exemption, you end up paying more tax."
Erik van Huet
Business office advisor at Alpina Roerdalen
Self-employment deduction down
The self-employment deduction is significantly lower in 2024 than it was a year earlier. In 2024, the self-employment deduction amounts to €3,750. That is €1,280 less than in 2023. The self-employment deduction is a tax benefit for self-employed entrepreneurs who spend more than 1,225 hours per year on their business. It was previously announced that the self-employment deduction will be phased out.
Energy investment deduction lowered and extended
The energy investment deduction (EIA) for entrepreneurs will be extended by 5 years, through 2028. The EIA allows you to deduct part of the investment costs from your taxable income. As a result, you will have to pay less tax. The percentage you may deduct falls from 45.5 to 40 percent in 2024. There are also some requirements for the investment. For example, the investment must not be less than €2,500 and not more than €149 million.
Box 2
As of Jan. 1, 2024, the uniform tax rate in Box 2 (26.9 percent) will be replaced by two rates. A tax rate of 24.5 percent will apply to dividends received up to €67,000. On the amount above that, you pay 33 percent tax. Tax partners benefit twice from the low bracket.
