Income tax brackets and rates to change

What changes?

Are you an entrepreneur for income tax purposes? The classification of tax rates and tax brackets is going to change. In 2025 there will be 3 tax brackets, each with their own rate. As a result you will pay less tax on the first part of your income. Also, the employment tax credit will go up. The general tax credit (algemene heffingskorting, AHK) will go down.

New tax rates

These are the rates you pay in 2025 if you are younger than the AOW pension age:

• rate in the 1st bracket: 35.82%
• rate in the 2nd bracket: 37.48%
• rate in the 3rd bracket: 49.50%

New tax brackets

These are the income thresholds per tax bracket in 2025:

• 1st bracket: income up to €38,441
• 2nd bracket: income from €38,441 to €76,817
• 3rd bracket: income over €76,817

Employment tax credit up

The employment tax credit will go up to €5,599 in 2025. In 2024 it was €5,532. The amount of the employment tax credit depends on your taxable profit. The amount you can deduct becomes lower if your taxable profit is €43,071 or more.

General tax credit lower

The general tax credit (AHK) will go down with €335. In 2025, the maximum general tax credit is €3,027. This was €3,362 in 2024. At a minimum income, the maximum deduction applies. The AHK becomes lower if you earn more than the minimum income.

With these adjustments the government wants to make sure citizens and entrepreneurs with a middle income will have more to spend.

For whom?

• self-employed professionals (zzp’ers)
• SME entrepreneurs with a sole proprietorship or general partnership

When?

The change in law is expected to enter into effect on 1 January 2025.

Please note: The effective date of this measure is not yet final. Entry into force is subject to its passing through the Lower and Upper Houses (Tweede en Eerste Kamer) of parliament. After publication in the Staatsblad or Staatscourant (Government Gazette, in Dutch) the law can take effect.

Do you think government rules are unclear?

Do the rules create unnecessary administrative burdens? Or do you know how the rules could make doing business easier? You can report this (anonymously) to the Regulatory Reporting Centre (Meldpunt regelgeving).