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Written by:
Bas Hollenberg



Measures from the Hague to fight the crisis lay within reach. With the resignation of the cabinet a less ambitious part of the proposed measures will be implemented.

A brief summary of the plans: Increase VAT, retirement age increased to 66 in 2015, a zero increase in the public sector and the tax-free travel allowance will be abolished to maintain the lowered transfer tax rate of 2%. These are some of the highlights from the Catshuis reform package.

More details
The tax-free travel allowance (19 cents per kilometre or the actual cost of public transport) will be completely abolished. Consequently the current exemption from the private use addition for company cars which are privately used for less than 500km expires (this exemption will be phased out over four years due to current lease contracts). The definition of delivery van will be more sharply defined in order to limit unwanted effects. The exemption for red diesel will be abolished in two stages from 2013.
The new work-related costs scheme (vehicles and public transport) will yield 600 million EUR and consequently, employers may continue to reimburse the business kilometres.

Mortgage interest deduction
From January 1, 2013 the interest paid for new mortgages is only deductible if it concerns a loan which will be fully repaid over the term (yield 3.4 billion). The KEW remains for existing cases. The gift facility designed for own property debt repayment will be expanded from 50,000 EUR to 100,000 EUR and the age limit for the receiving party will be increased to 45.

VAT Increase
The lower VAT rate will be increased by 1% and the general VAT rate by 2%. By 2014 half the proceeds will be used to lower the income tax rates, and the whole amount from 2015.

Base expansion income tax/corporate income tax, introduction profit box income tax
The introduction of the profit box to the income tax return as of 1-1-2015 is being prepared. For this purpose, first a base expansion (scrapping of tax deductions) for the business community will be implemented. On balance there will be an increased tax burden of 350 million EUR (60% from the self-employment deduction and beginners deduction; 40% from the abolition/reduction of the VAMIL, KIA EIA and the MIA).

These are just a few of the fiscal measures: for more information refer to the complete package of measures (in Dutch) pakket maatregelen Catshuisberaad  

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