Tax plan 2023: is there anything left to gain?
As happens every year on the third Tuesday in September, our king has read the King's Speech and the financial plans for 2023 have been announced by the Ministry of Finance. While some people may be more concerned with the hats of the ministers, we have once again looked at the VAT and transfer tax measures for you this year.
The package of tax measures as presented every year on Budget Day this year obviously contains far-reaching proposals to support and alleviate the financial situation of Dutch households. To this end, announced tax measures mainly concern other taxes. The currently proposed changes in VAT and transfer tax effective January 1, 2023 and beyond have nothing to do with the current financially serious situation.
I list for you the proposed changes regarding VAT and transfer tax in the Netherlands.
Most prominent change to take effect on January 1, 2023 is the application of the 0% rate to the supply of solar panels for homes c.s. and their installation. In particular, this will eliminate the administrative burden that individuals must experience when they install solar panels on their homes and reclaim the VAT. Incidentally, that burden is even more in the implementation by the tax authorities and the follow-up work related to the exemption for small entrepreneurs and the processing of VAT returns and forms.
"Nicer ...." and statements like that can soon be omitted.
Why the 0% rate was limited to residential buildings is beyond me. After all, the Tariff Directive allows member states to also tax at 0% the supply and installation of solar panels on buildings used for social purposes.
So there will be a study of that first, and demarcation issues (what are social purposes?) will have been understood as insurmountable at this time. Too bad, but so be it.
It will not have escaped your notice that nitrous oxide was used for other purposes than originally intended. From now on, the supply of nitrous oxide cartridges is taxed at 21%. The supply only falls under the reduced VAT rate when used as medicine. I can already see the air bottles used in hospitals coming into the back seat of many "hot hatchbacks"....
The general transfer tax rate is being raised again, now to 10.4%!
Without blinking an eye, the explanation is crystal clear. The rate increase is part of a set of measures to provide housing investors with a direct return that is not very attractive. Indeed, a shift in the number of rental homes to owner-occupied homes is expected, and then effects for first-time buyers and move-up buyers are expected.
Now I don't want to be known as the crankiest VAT & transfer tax specialist in the country but gradually it is taking me less and less effort to (start) getting that nomination.
After all, I don't believe much of it.
What else to expect
Evaluating the utility of tax schemes, towards simplification?
We can expect more measures and adjustments from the current State Secretary of Finance, under the strict supervision of Mr. Nijboer, in the coming years. A broad investigation into all kinds of tax schemes, partly based on the Gündogan motion, is being conducted and should provide insight into effects (efficient and effective).
These are hardly regulations that relate to VAT or transfer tax. Except for impracticable exemptions in the transfer tax (in connection with urban redevelopment).
Don't get me wrong, simplification is always welcome, preservation of desired nuance is in order.
In the summer of 2023, we will be able to take note of the first modifications.
Do we get rid of VAT obligations in other EU member states ?
From Europe, and in particular for Dutch entrepreneurs with VAT obligations in other EU member states, an important proposal from the European Commission is on the horizon. The intention is to settle foreign obligations from now on through Dutch VAT registration (single registration). Expansion of the now proven one-stop-shop models is imminent.
This makes me happy; and with me many entrepreneurs who have to incur costs, time and effort to fulfill pure administrative processes in other countries.
By the way, based on our "one stop shop" service, I can tell you that we are definitely not there yet and the charges will not end up in the trash basket for a long time. Take heart; together we will get there.
Less Grey, more support
Paul Cramer is a VAT partner at Less Grey, specializing in indirect taxes.