Netherlands Proposes Tax changes for 2014

SUNNYVALE, Calif. - Sept. 25, 2013 - PRLog -- Significant changes for businesses, most of which are slated to come into force from January 1, 2014, include changes to certain provisions governing the Research and Development related tax reduction cap, extension of an individual tax bracket, amendments to certain provisions concerning tax credits and abolition of the wage tax, reports Nair & Co.’s International Tax Services (http://www.nair-co.com/international-tax-compliance-services.aspx) Team.

Key tax incentives enclosed in the 2014 Tax Plan include the following measures:

*          Research & Development activities:

*          The wage tax reduction cap will go up by €50,000 to arrive at €250,000 (presently - € 200,000).

*          Additionally, the rate of the wage tax reduction will go down to 35% (presently - 38%).

*          Further, deduction of cost and expenses associated with qualifying R&D activities will go up to 60% (presently - 54%).

*          Extension of an Individual Tax bracket:

*          No adjustment for inflation will apply to tax rates.

*          The individual tax rate bracket corresponding to the tax rate of 42% will be stretched.

*          Tax credits, the "levy rebates" (heffingskortingen) amendments:

*          Tax rebate for employed individuals:

*          Tax credit for employed individuals will go up to €2,097.

*          Simultaneously, over a phase of 3 years, the tax credit for individuals with high incomes will progressively get abolished.

*          General Tax rebate:

*          From January 1, 2014, the general levy rebate will be raised to €2,100.

*          From 2015, for taxpayers coming under the upper tax bracket, the rebate will be abolished.

*          For taxpayers coming under the second and third income tax brackets, the rebate will go down by 2%.

*          Wage tax:

*          From 2015, the 16% tax paid by employers on certain employees (employees drawing wages of more than €150,000) will be abolished.

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