The four parties forming the Governing coalition have agreed upon a set of tax changes, both for corporate and personal income tax. The new changes would also include a set of measure to fight against tax avoidance. The experts at our Dutch law firm can give you complete details on the announced corporate income tax cut and how the other changes would impact your business in the country.
Proposed tax measures in the Netherlands
A Government coalition agreement published at the beginning of October, that stipulated the Government program for 2017 thru 2021 includes a set of changes to the corporate and the personal income tax in the Netherlands.
The agreement includes an important reduction of the corporate income tax, which would take place in stages, from 25 percent to 21 percent. The lower20 percent rate for corporate profits of up to 200,000 EUR would be reduced to 16 percent.
Moreover, the 15 percent dividend tax
would be partially abolished, in an attempt to attract more foreign investors in the Netherlands. The coalition has also thought of a set of measures to combat tax avoidance: withholding taxes will be introduced on the payment of royalty and interest made to low-tax jurisdictions.
The personal income tax regime will also be changed: the four taxation brackets will be reduced to only two, of 37 percent and 49.5 percent.
The new Dutch Cabinet is likely to be sworn in by the end of October, however, it is yet unknown when these measures will enter into force. One of our Dutch lawyers
can keep you up to date on the tax law changes.
The current Dutch taxation regime
The current corporate tax regime
includes a corporate income tax value of 20% of the first 200,000 EUR and 25% of taxable profits that exceed this amount. Currently, there is no withholding tax on royalties and interest.