The New Year is over a month old and we want to start this year off right as well. Do you? In this article we set out two actions you can think about now, rather than at the end of the year.
Gifts
Every calendar year, you can make a tax-advantaged gift of a certain amount to your loved ones, such as your children. The gift tax has four different rates, based on the amount of the gift and the relationship between the donor and the recipient. Below is a table showing the rates in 2025:
| Portion of taxed acquisition between | and | If obtained by partner or direct line descendants | In other cases |
| € 0 | € 154.197 | 10% | 30% |
| € 154.197 | and above | 20% | 40% |
The above table means that if you want to gift funds to your child in 2025, the first €154,197 is taxed at 10% and the excess is taxed at 20%. The low rate applied in 2024 up to an amount of €152,368.
By the way, donations are exempt from gift tax to a certain extent. For example, in 2024 there was an exemption for gifts to your child of €6,633. This exemption was increased to €6,713 in 2025. For gifts to children between 18 and 40 years old, you can also make use of an increased exemption, amounting to
€ 32,195 in 2025. This exemption will then replace the annual exemption for gifts to children.
The general exemption has been increased from €2,658 to €2,690.
If a donor dies within 180 days of the gift being made, the gift will be qualified for tax purposes as an acquisition from an inheritance. In that case, the gift exemption will expire, so the gift may still be taxed (with inheritance tax). In addition, a portion of the gift may potentially be taxed in the second rate bracket.
Are you planning to make donations in 2025? If so, let us know now!
Dividend Payments
When a company pays dividends to private individuals, the company must withhold 15% dividend tax on them. This rate is unchanged. Subsequently, the substantial interest holder still owes income tax (Box 2) in private. Box 2 income up to € 67,804 (in 2024 this amount was € 67,000) per tax partner is taxed at 24.5% income tax (effective rate after dividend tax is 9.5%). Together with his/her tax partner, the substantial interest holder can therefore pay a total of € 135,608 (2024: € 134,000) in dividends at the low rate. However, dividend payments above € 67,804 per tax partner will be taxed at 31%. In many cases, therefore, it will be advisable to pay out as many dividends as possible each year at the low rate. If desired, we can formalize the dividend distribution already at the beginning of the year.
In this context, however, we would like to point out the following:
- The limit for debt under excessive borrowing is a maximum of €500,000 as of the reference date of December 31, 2025. If you expect to have to pay a dividend later in the year to reduce the debt position with your own company, this should be taken into account when determining the amount of the dividend payment at the beginning of this year.
- Starting in 2025, Box 2 and Box 3 income will also count toward the phase-out of the general tax credit. The reduction of the general tax credit applies per tax partner. Specifically, this means that to the extent that the other income (or the other income of the tax partner) is higher than €28,406 and lower than €76,817, a dividend payment up to €67,804 per tax partner will be taxed in 2025 at an effective rate of approximately 31% instead of 24.5%. Nevertheless, a dividend attributed to a tax partner with other income between €28,406 and €76,817 may also be tax favorable in appropriate cases. We would be happy to look at your specific situation with you.
Finally
Do you want to start the new year right away, and not wait until the stress at the end of the year? Then contact us through your relationship manager, by phone at 040 - 2 504 504 or using the contact form below.