KRALENDIJK- The reduction of, among other things, the tax-free sum and the elderly person’s allowance follows from established policy and in that sense is no different from what has happened in other years. At least that is the position of the Dutch Caribbean Tax Authorities (BCN) in response to questions from ABC Online Media.
“From 2011, the tax-free amount was adjusted every year in line with inflation. The policy for this calculation for this is laid down in applicable law. The Consumer Price Index (CPI) Caribbean Netherlands, as determined annually by the Central Bureau of Statistics of CaribbeanNetherlands, is used for this purpose. Because the CPI fell by 3.0% on balance in the period July 2020 – July 2021, the tax-free sum has also decreased by 3.0% as of January 1, 2022,” according to a joint response from BZK and the Tax Authorities.
Somewhat peculiar is the explanation that the fall in CPI was partly caused by a temporary subsidy on, among other things, the costs for water and electricity in the context of the COVID-19 pandemic.
“Because last year there was a one-off subsidy to cover, among other things, the rising energy costs, which reduced the costs for residents, there is now talk of deflation in CPI. As a result, the tax-free amount will fall for 2022. If the prices rise (extra) again this year, also in relation to the discontinuation of the temporary subsidy, the tax-free amount will increase again via the price index figure for 2023,” according to the explanation received.