Several changes will affect freelancers in 2021. This article summarizes all the consequences of Budget Day 2020 for freelancers in 2021. This will give you a good idea of what to expect in the new year.
Reduction of income tax rate
If your annual income is less than €68,507, your tax rate will decrease. Previously, you paid €37.35% in tax on your income; in the new situation, this will be €37.1%. This applies to your annual income tax return. If you earn more than this amount, the tax rates will remain the same.
Larger tax-free allowance for savings and investments
When you save or invest money, for example, it's considered your assets. As a self-employed person, this can be a way to save for your retirement, for example. You also pay income tax on your assets in Box 3. This blog explains exactly how this works. Before you pay tax, however, there's a tax-free allowance. You don't have to pay tax on that portion of your saved and invested money. Until now, the tax-free allowance was just over €30,000. This will be increased in 2021 to €50,000 if you don't have a tax partner, or €100,000 if you do.
Direct consequence for the self-employed: reduction of the self-employed persons' deduction
If you meet the hours criterion, you may be eligible for the self-employed person's tax deduction. This deduction is gradually being phased out. Under the previous plans, the self-employed person's tax deduction would be reduced to €5,000 in 2028. It has now been announced that the scheme will be further reduced to €3,240. This means that the self-employed person's tax deduction will be €6,670 in 2021, compared to €7,030 in 2020.
Changes to car tax
If you have a company car, several things will change. In the new situation, the additional tax liability will be determined based on stricter limits for your car's CO2 emissions. This page shows what this means for your car. In addition, there will be additional incentives to purchase a solar-powered car. Starting in 2021, electric cars with solar panels will receive a discount on the additional tax liability across the entire list price, regardless of the list price.
Increase in the labor tax credit and general tax credit
In the Netherlands, you receive a tax credit on your income tax when you work. This is also called the labor tax credit. This credit will increase in 2021. This will ultimately mean you'll pay less income tax. In addition, the general tax credit will also increase for lower incomes. The general tax credit is a similar income tax credit, only it applies to everyone (including non-workers). The tax credit will only increase for people with an income below €68,507 per year.
Reduction of income-related combination discount (IACK)
If you have children under 12, you are generally entitled to the income-related combination discount. This is also known as the IACK (Income-related Combination Discount). The number of people eligible for this discount has increased, so the maximum discount has been reduced by €113.
No more transfer tax for young starters, investing in housing becomes more expensive
When you buy a home, you normally have to pay transfer tax on it. This amounts to 2% of the purchase price. Because it's currently very difficult for first-time buyers to enter the housing market, they're offering some relief starting in 2021. Transfer tax will be waived for people between 18 and 35 who are first-time buyers. Regular transfer tax will continue to apply to those moving up the property ladder. In addition, the transfer tax for people buying a home as an investment property will increase to 8%.
Source: https://paperdork.nl/prinsjesdag-2020-gevolgen-zzp-2021/
