Income tax rates 2023
The Tax Rates and Levy Rates in 2023
Box 1: income from work and home
Not yet entitled to AOW
Effective 1 January 2023, the income tax rates for taxpayers born on or after 1 January 1946 who have not yet reached the AOW entitled age are as follows:
| with a box 1 income of more than | but no more than | The tax rate | Rate of social insurance contributions | Total (2023) |
| - | €37,149 | 9,28 % | 27,65 % | 36,93 % |
| €37,149 | € 73,031 | 36,93 % | - | 36,93 % |
| € 73,031 | - | 49,50 % | - | 49,50 % |
AOW entitled
The tax rates and the national insurance contribution rates are the same for everyone. However, those who have reached the AOW entitled age no longer have to AOW pension contributions. This results in a lower combined rate in the first bracket (2023: 19.03% instead of 36,93%). In the second and third tax brackets, the rate does not deviate.
AOW entitlement - born after 1 January 1946
As of 1 January 2023, the income tax rates for taxpayers born on or after 1 January 1946, but who have reached the AOW entitled age, are as follows:
| with a box 1 income of more than | but no more than | Tax rate | Rate of social insurance contributions | Total (2023) |
| - | €37,149 | 9,28 % | 9,75 % | 19,03 % |
| €37,149 | € 73,031 | 36,93 % | - | 36,93 % |
| € 73,031 | 49,50 % | - | 49,50 % |
AOW entitlement - born before 1 January 1946
As of 1 January 2023, the income tax rates for taxpayers born before 1 January 1946 are as follows:
| with a box 1 income of more than | but no more than | Tax rate | Rate of social insurance contributions | Total (2023) |
| - | €38,703 | 9,28 % | 9,75 % | 19,03 % |
| €38,703 | € 73,031 | 36,93 % | - | 36,93 % |
| € 73,031 | 49,50 % | - | 49,50 % |
The first bracket extends a little further for this category of taxpayers, as a result of which they owe the low rate (2023: 19.03%) on a larger part of their box 1 income.
Rate deductions box 1
The maximum rate at which certain deductions, such as mortgage interest, the entrepreneur's deduction, the SME profit exemption and the personal deduction, are taken into account in box 1 will decrease from 40% to 36.93% in 2023. In that case, a rate adjustment is applied to the calculation of the income tax due.
Box 2 and box 3
In 2023, the rate in box 2 (income from a substantial interest) will remain the same as in 2022, namely 26.90%.
The rate in box 3 (income from savings and investments) will increase to 32% as of 1 January 2023. The tax-free allowance will increase to €57,000 per taxpayer (€50,650 in 2022).
For the years 2017 to 2022, the box 3 income was calculated using the old and new calculation method. As of 2023, the box 3 income will only be calculated using the new calculation method based on the Box 3 Restoration of Rights Decree.
The old calculation method assumed that the taxpayer saved part of his assets and invested part of his assets. The new system distinguishes between different assets. A separate fictitious return is used for each asset type, which attempts to better approximate the actual returns.
The percentages in the table below refer only to provisional returns. The percentage for other investments and other assets is final. On the basis of Art. 10.6b of the Income Tax Act 2001, the percentages are replaced by another percentage at the end of the year by means of a ministerial regulation with retroactive effect to the beginning of the calendar year. In the 2023 provisional assessment scheme, the tax authorities apply a percentage of 0.36% for savings and 2.57% for debts.
| Type of power | Fictitious returns |
| Savings | 0,01% |
| Investments/other assets | 6,17% |
| Debts | 2,46% |
Corporate income tax and dividend withholding tax rates
The regular corporate tax rate will remain the same at 25.8% in 2023. The so-called SME rate will rise to 19% in 2023 and will apply up to a taxable amount of €200,000.
| Year | was in 2022 | is in 2023 |
| SME rate (boarding rate) | 15% (taxable amount up to €395,000) | 19% (taxable amount up to €200,000) |
| Regular rate (top rate) | 25,8% (taxable amount from €395,000) 25,8% (taxable amount from € 200.000) |
The dividend withholding tax rate in 2023 is unchanged at 15%. In addition, the conditional withholding tax on interest and royalty payments came into effect on 1 January 2021. In 2023, the rate will be 25.8% (equal to the highest corporate income tax rate).
In 2023, the rate of the innovation box will remain the same as in 2021 and 2022, namely 9%.
Real estate transfer tax rates
There are a few points of attention for transfer tax in 2023. The general rate will increase from 8% to 10.4% in 2023. The following exceptions apply to the acquisition of a home that will (permanently) serve as your main residence:
- First-time buyers between the ages of 18 and 35 are subject to a one-off exemption from transfer tax for their first home (main residence), which in 2023 will be limited to homes with a home value of no more than €440,000. In 2022, an anti-abuse provision was added, which is intended to prevent this limit amount from being circumvented by dividing the acquisition of the home into parts. However, that provision only applies if the first acquisition took place on or after 1 April 2021.
- Transferees who acquire a home (main residence) from 2021 onwards will pay a reduced transfer tax rate of 2%.
Gift and inheritance tax
In 2022, gifts were exempt from gift tax of €5,677 per child, while other recipients were exempt from €2,274. In 2023, an exemption from gift tax of €6,035 per child applies, while an exemption of €2,418 applies to other recipients. In 2022, an exemption of €21,559 applied to inheritance tax for children and grandchildren. In 2023, this amount has been increased to €22,918.
The rate paid by the recipient of a gift or inheritance on the amount above the exemption limit depends on their relationship to the donor. For 2023, the following rates apply:
| Rate when acquired up to €138,642 | (2022: € 130,425)
Rate on acquisition insofar as it exceeds € 138,642 | (2022: € 130,425)
|
| Partner & child | 10% | 20% |
| Grandchild | 18% | 36% |
| Other acquirer | 30% | 40% |
A child of the donor, if he or she is between 18 and 40 years old, may obtain a larger gift from the parents tax-free on a one-off basis. In 2023, this will involve an amount of up to €28,947. If this one-off donation is intended for your child's studies, you can donate a maximum of € 60,298 without your child paying gift tax on it.
The one-off increased exemption for gifts related to an owner-occupied home has been significantly reduced to €28,947 in 2023. This exemption is subject only to the requirement that the transferee must be between 18 and 40 years old. The recipient does not have to be a child of the donor.
For all one-off increased exemptions, the acquirer must explicitly invoke the relevant exemption in the gift tax return.
Social insurance premium rates
What social insurance contribution rates will change in 2023? Below you will find an overview of the percentages:
| Definition | 2022 | 2023 |
| AOW premium | 17,90 % | 17,90 % |
| ANW premium | 0,10 % | 0,10 % |
| Long-term care premium (WLZ) | 9,65 % | 9,65 % |
| AOF Small Employers AOF large employers |
5,49 % 7,05 % |
5,82 % 7,11 % |
| AWF premium employer (low) | 2,70% | 2,64% |
| AWF premium employer (high) | 7,70% | 7,64% |
| UFO bounty | 0,68% | 0,68% |
| WKO premium employer | 0,50% | 0,50% |
| Income-related employer's ZVW levy (high) | 6,75% | 6,68% |
| Income-related ZVW contribution (low) | 5,50% | 5,43% |
In 2023, the maximum premium income limit for employee insurance and the Health Insurance Act will be €66,956 (2022: €59,706).
