The legislative process for the Belastingplan BES 2025 began with the submission of the initial proposal in November 2024, followed by debates and amendments in the Dutch Parliament (“Eerste en Tweede Kamer”).
Share this article
Share this article
This process aimed to address key areas of economic and administrative improvement for the BES islands. After thorough deliberations, the revised measures were approved on December 17, 2024, with most amendments scheduled to take effect starting January 1, 2025. Here is a summary of the major changes that will impact taxpayers on the BES islands:
1. Reduction of the Investment Facility Term and Adjustment in Real Estate Tax (Vastgoedbelasting) Rates:
o The term for the investment facility, which freezes property valuation for tax purposes, has been reduced from 10 to 5 years. This change reflects a shift from promoting long-term investments to addressing the reduced economic relevance of this facility after five years.
o The property tax rate for hotel-related real estate will increase gradually from 10% to 11% (effective rate from 0.4% to 0.44%). This measure aligns hotel tax rates with those of other real estate categories, given the improved profitability of the sector.
2. Increase in Revenue Tax (Opbrengstbelasting):
o The tax rate on profit distributions, previously set at 5%, has been increased to 7.5%. This adjustment aims to ensure fairness in taxation between corporate structures and personal income while aligning BES taxation with international norms.
3. General Expenditure Tax (Algemene Bestedingsbelasting – ABB) and Small Business Scheme:
o A new provision ensures the annual adjustment of the small business scheme threshold from 2026, based on inflation, as defined by the table correction factor in the Income Tax Act BES.
4. Adjustments in Income Tax (Inkomstenbelasting):
o The tax-free allowance will now be tied to the statutory minimum wage to prevent the fiscal erosion of income for lower-wage earners.
o The threshold for the higher tax bracket has been lowered to $50,000 (previously $322,769) to improve progressivity and increase revenue.
o The option to defer tax on severance payments via a “stamrecht” has been abolished, harmonizing BES tax treatment with that of the Netherlands.
5. Reforms in Wage Tax (Loonbelasting):
o Employers are now required to verify the identity of employees. The deadline for compliance has been extended to April 2025.
o A new regime introduces “fictitious employment” for partners of significant shareholders, ensuring equitable tax treatment for contributions to businesses.
6. Customs and Excise Tax Modernizations:
o Introduction of self-issued certificates of origin under the REX system for goods imported to the BES islands.
o Enhanced regulations for container sealing and penalties for non-compliance, along with expanded temporary importation rules for specific maritime activities.
Contact
With this summary we aim to provide you with a practical overview of the relevant changes affecting taxpayers in the BES-islands starting January 1, 2025.
Should you require more information on the subject matter, please do not hesitate to contact us.
Key Contact
Quincy Lont