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2022 Tax Plan

What will the 2022 Tax Plan look like?

The third Tuesday of September we traditionally celebrate Budget Day or ‘Prinsjesdag’. The King delivers his yearly speech, while the government presents its budget and the tax plan for 2022. As we do every year, we will of course inform you about the tax measures that will be presented, although the question is in what form the Tax Plan will be presented this year.

At this moment the government has a caretaker status, so it must limit itself to urgent matters and subjects that are not politically controversial. This means that this year the 2022 Tax Plan will be different from previous years. We will outline the three scenarios of the cabinet formation and its effect on the 2022 Tax Plan.

Cabinet formation: three scenarios with an effect on the 2022 Tax Plan

1. New cabinet before mid-September

If the political parties put aside their mutual objections, start negotiating with each other and reach an agreement before mid-September, it may just be that we celebrate Budget Day on 21 September as usual: with a full 2022 Tax Plan. Because the negotiations have not yet started, and because the previous cabinet needed more than three months to reach an agreement and the negotiators are likely to go on holiday for another three weeks, this seems the least realistic scenario.

2. Advanced negotiations by mid-September

Given the assignment to write the first attempts towards a coalition agreement in the short term, a more likely scenario is that the parties are still negotiating by mid-September. The outgoing Government will then have to present the budget, and probably the already announced 2022 Tax Plan as well. On a Budget Day in this scenario, only non-controversial tax proposals will probably be submitted, about which there is broad political consensus.

If the cabinet negotiations are in a concluding stage, the Lower House may choose to postpone the General Political Considerations and the budget debate until after the formation is completed. This is because the new coalition, when it takes office, will want to adjust the budget and will also make changes in the tax area. However, there is not much time left for measures that will take effect as of 2022. For example, changes to the wage tax tables can only be implemented until 22 November.

Although tax changes are possible on Budget Day, they are probably less ambitious than on a regular Budget Day.

3. No negotiations or starting negotiations by mid-Septembe

A final scenario is that negotiations have not yet started by mid-September, that they are only in the early stages, or that the parties have even given up negotiations and new elections are to be held. In each of these variations, the outcome for Budget Day is the same: the outgoing Government will present the budget and the 2022 Tax Plan. 

The question is whether the outgoing Government can limit itself to non-controversial subjects in this scenario. In view of the extensive challenges facing the Netherlands - for example the recovery of the economy, the housing shortage and the climate crisis - the outgoing Government may nevertheless want to submit a policy-rich budget and an (almost) fully-fledged tax plan. As long as there is a majority in favor of the plans, it can be passed and implemented. However, this seems to be difficult to reconcile with the call for more dualism and counter-power from the House of Representatives. If the Government wants to implement more ambitious tax changes, we expect it to seek broader support than just a regular majority of votes.

Fundamental revision of the tax system is necessary

Apart from the special situation concerning the Government, the tax system deserves a fundamental revision, in which not taxation but social issues should be leading. The formation of a new Government should result in the greening of the tax system. And when reforming the tax system, an investment in the implementation is crucial. We therefore hope that the politicians in the Netherlands will look at this consciously and be inspired by the vision of our experts about what will be needed in the near future to lead the Netherlands through today's challenges. 

Until Budget Day, this page will remain up-to-date with relevant information. Are you curious about the possible plans of the current or future Government for 2022 and are you interested in the highlights of the 2022 Budget per ministry? Then sign up here for our newsletter.

Expectations for Budget Day

The State Secretary has published a list of bills that will be made public on or around Budget Day. From this complete list of measures, we made this selection with some additional measures that we also expect on or around Budget Day:

  • Introduction of a specific wage tax exemption for the reimbursement of home office costs;
  • Changes in order to make it more attractive tax wise to provide stock option rights as wages, with the purpose of stimulating innovation;
  • Change in the tax treatment of foreign directors fees, by withdrawing the Decree which approves the application of the exemption method; 
  • Introduction of STAP (Stimulation of the Labor Market Position), and abolition of the deductibility of costs of education for income tax purposes; 
  • Change in income-related tax credit (IACK) for non-resident taxpayers;
  • Simplification of the WBSO application system and clarification of the legislation regarding R&D costs and expenditures;
  • Changes in the owner-occupied home scheme in the event of a joint purchase and financing of an owner-occupied home by tax partners, and in the event of the death of one of the partners; 
  • Minor changes in the property transfer tax with regard to the rate differentiation for starters introduced in 2021; 
  • Simplification of the one-stop shop in VAT legislation for e-commerce; 
  • Prevention of possible double taxation of energy storage; 
  • Introduction of a tax liability measure for reverse hybrid entities (final part of ATAD 2); 
  • The Bill combating informal capital structures is expected to be published this summer (Bill to combat mismatches when applying the arm's length principle); 
  • Limitation in time for crediting dividend withholding tax and gambling tax with corporate income tax; 
  • NB The Bill regarding the qualification of foreign legal entities will not be published on Budget Day (as previously expected) but only in the winter 2021/2022; 
  • Specific measure in the Bill on reducing the landlord levy; 
  • Bill implementing excise duty Directives 2022. 

We will keep this overview up to date as soon as more measures become known. 

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