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As of January 1, 2022, significant tax changes took place for entrepreneurs: a minimal reduction in the income tax rate, a multi-year phase-out of the self-employed deduction, a more favorable environmental investment deduction (MIA), and unlimited carry-forward of losses in corporate income tax (with an annual limit of €1 million). Please note: this is a review of the changes in 2022; amounts and percentages have changed since then.
On January 1, 2022, several things changed for entrepreneurs, particularly regarding taxation — after all, a new income year with new rules starts at the turn of the year. We list the most important changes from that time.
Income tax
The rate in the first bracket (income up to 69,398 euros) fell slightly, from 37.10% to 37.07% — for all entrepreneurs who had not yet reached the state pension age. For state pensioners, the rate fell from 19.20% to 19.17%.
In contrast, there was a phase-out of the self-employment deduction: a maximum of 6,310 euros in 2022, and subsequently decreasing further annually (by 360 euros per year up to and including 2027, by 390 euros in 2028, and by 110 euros per year from 2029 up to and including 2036), to a final maximum of 3,240 euros in 2036.
The MIA became more advantageous
Good news for sustainable investing: the Environmental Investment Deduction (MIA) was increased, making investing in innovative, environmentally friendly business assets more attractive. The support percentages rose from 13.5% to 27%, from 27% to 36%, and from 36% to 45%.
Corporate Income Tax
From the 2022 financial year onwards, it became possible to carry forward losses indefinitely for offsetting against both past and future profits, whereby deductible losses of up to €1 million per financial year could be fully offset against profit. A limit applied above this amount. Additionally, withholding taxes in dividend and gambling tax could only be offset against corporate income tax.
Other changes
Avoiding tax abroad became more difficult: foreign corporate income tax henceforth had to be offset in a mandatory order, whereas previously one could choose which portion to carry forward. Moreover, on Budget Day 2021 and in the coalition agreement at the time, even more plans were announced that were to follow in the course of 2022.
Frequently Asked Questions
Are these figures still valid?
No. This is a review of the changes as of January 1, 2022. Rates, the self-employment deduction, and other amounts have been adjusted multiple times since then — please consult the current figures for the current tax year.
What happened to the self-employment deduction?
It was phased out starting in 2022, from a maximum of 6,310 euros in 2022 to ultimately 3,240 euros in 2036. (The phase-out was subsequently accelerated by new legislation; check the current status.)
What changed in corporate tax?
From the 2022 financial year, losses became deductible without limit, with a limit of €1 million in annual profit for full set-off above that.
Advice on your tax and legal position
Do you want to know what the current regulations mean for your business? The legal experts at MKB Juristen will work with you to find the answer. View our expertise in corporate law or contact us.
