Every year, the Dutch tax authorities implement legislative changes that are of (great) importance to freelancers. This year is no different: most of these changes start from the 1st of January 2023. As a freelancer, do you have to file tax returns and pay income tax in the Netherlands? In this blog post, we’re sharing the main legislative changes for 2023 - that you know what’s coming and to help you prepare.
1 Private business ownership allowance decreases by €1,280
Do you work at least 1,225 hours a year? Then, you are eligible for private business ownership allowance, or zelfstandigenaftrek, as it is called in Dutch.This allowance will reduce your taxable income. This decreases, however, which effectively means you need to pay more tax. However, in 2023, this allowance is €5,030, which is a decrease of €1,280 compared to last year. This effectively means you need to pay more tax. The government is gradually reducing the private business ownership allowance in the coming years to 900 euros in 2027. Use the Income Tax Calculation Tool (in Dutch) to see what the changes mean in your situation.
2 Tax-free travel allowance: up from 19 cents to 21 cents
From 2023, the tax-free travel allowance (or onbelaste reiskostenvergoeding in Dutch) will be 21 cents, compared to 19 cents in 2022. As a freelancer, you may deduct this amount from your profit. This applies to business trips with your private car, motorbike, public transport, as well as your bicycle. From 2024, the tax-free travel allowance will increase to 22 cents.
3 Bye bye Fiscal Retirement Reserve (FOR)
As of 2023, you can no longer build up the Fiscal Retirement Reserve (fiscale oudedagsreserve, FOR in Dutch). Currently, some 300,000 freelancers have a FOR on their balance sheet until 2023. These previously built-up FOR reserves will remain and can be settled under the old rules. By using the FOR, you did not have to pay tax on some part of your profits - the FOR gave you tax relief. With the reserved amounts, you could, for example, purchase an annuity (lijfrente in Dutch) that pays out when you retire. Tax will then be charged over the annuity terms that are paid out. From 2023 however, the Dutch government is canceling this retirement reserve.
4 Childcare benefit will now depend on months worked
Do you have young children and do you receive childcare benefit (kinderopvangtoeslag in Dutch)? From 1 January 2023, childcare benefit no longer depends on the hours worked by the parent who worked the least number of hours. For many parents - especially freelancers and other entrepreneurs - it was very hard to estimate the number of hours worked. Therefore, the government takes this barrier away and instead focuses on the number of months worked.
Do you have any questions regarding these new rules and legislations? The Dutch Chamber of Commerce (KvK) is the official and independent Dutch administrative body for businesses. Find more information and inspiration on their website (in Dutch). Or, if you prefer to read about new and updated tax rules and other Dutch government information in English, visit Business.gov.nl. We wish you all the best of luck for a thriving 2023!