At the end of November 2019 already… Just a little longer and there will be a decorated tree in your living room. A little longer and it will already be 2020.
Perhaps there are still things you can do to start 2020 in your favor. Changes may also be coming that are relevant to you. In this newsletter you will find a list of points of interest.
Tip: Read only what sounds relevant. Can’t figure it out? If so, feel free to call!
Small business investment allowance (KIA).
Check your investments. Do you already exceed €2,300 for the 28% KIA? Or have you already invested € 106,150? Depending on your situation, proper planning (advancing or delaying the investment) can provide tax benefits.
Annually you are allowed 1.2% of gross salary untaxed. A deduction for the employer and untaxed income for the employee. Beneficial to the DGA who is donor and recipient. If you are a customer for payroll with us: we will process it for you by mutual agreement. In 2020, the WKR increases to 1.7% over the first €400,000 in wages.
Paying out dividends?
From 2020, the box 2 levy will be 26.25%. Which is now 25%. Paying dividends can be advantageous – but watch your assets in Box 3. If you exceed the thresholds there it quickly costs about 1% tax with which the benefit can be nullified. Paying dividends is also wise to clean up a incurred R.C. at your B.V. even before 2020.
IB deductions: payment timing is leading.
Gifts, specific healthcare expenses, mortgage interest, education expenses, etc. – in these cases, the time of payment is leading. If you make this payment in 2019, it is deductible in 2019.
Schooling deduction continues into 2020.
Our revolving-door cabinet has been threatening to eliminate the schooling deduction for some time. However, it is still valid for 2020. Advertise this when you provide training – or take advantage of the deduction for yourself. Starting in 2021, there will be an alternative to the training deduction (STAP budget).
Convert regular gift to periodic gift?
Do you regularly make donations to the same institution? Regular gifts are subject to a threshold – periodic gifts are not. Therefore, it may be wise to document your donations in a written agreement with the ANBI to which you give.
J.P. says “Dispute not!”. You are almost sort of halfway there already.
Reduce basis of box 3 levy.
The reference date for box 3 income is January 1. For IB 2020, we are looking at Jan. 1, 2020. Are you planning a major expense or donation? It may be advantageous to settle this before December 31.
Compensation to partner?
Does your partner work in your business and has not (yet) received compensation for it? Depending on your tax situation, and that of your partner, paying out business compensation may be tax-advantageous.
Write-downs to lower enterprise value?
Although depreciation is limited to a maximum of 20% of acquisition cost, valuation at lower value in use is not. Do you have assets worth less than book value? Then document this through a photo and/or other evidence. This allows you to take a deduction earlier in 2019.
Contracts up to date?
A DGA is required by law to put agreements with his B.V. in writing (2:247 BW). Is this right (yet)? It is also advisable for sole proprietorships/partnerships to periodically review your contracts.
VAT identification number.
If you are a sole proprietor for VAT purposes, you have been issued a VAT identification number. It must appear on your invoice starting Jan. 1, 2020. So what do you do promptly on
January 1, 2020 at 00:00 January 2, 2020 09:30? Right! Adjust invoice.
You will still need your “old” VAT number for communication towards the Tax Office.
VPB1st step-up rate to 16.5% (it is still 19% in 2019)
Can you get some expenses ahead to 2019? Then the IRS “pays” another 19% on that in 2019. Starting in 2020, the VPB rate drops to 16.5%.
VAT private use in last period return.
Remember that in the December or4th quarter return, private use should be included in the sales tax return.
Transfer tax to 7%? On residential properties, 2% remains.
It currently appears that the transfer tax for non-residential properties will increase to 7% effective Jan. 1, 2021. In practice, transfer tax is often a cost to the buyer. The transfer tax on homes will not be adjusted.
Small business allowance (KOR) is going to be overhauled.
Effective 2020, the old KOR will disappear for the new KOR. Does your turnover amount to < 20,000 and are you working primarily for individuals? Then opting for the new KOR may be beneficial.
Simplify addition v/d bicycle.
And the best for last: the business bicycle. Currently, you are required to keep KM records for your business bike. This madness will be over after 2019. From then on, a simplified addition rate of 7% on the list value will apply. For VAT, you don’t add up because VAT is already limited at the time of purchase.
On behalf of all these people and myself, congratulations on completing this blog.
Are you not yet satisfied in terms of tax tips? Then take a look here:
End-of-year tips 2019 Registered Tax Advisors.