Dutch authorities are considering reducing the corporate income tax in the near future, according to a statement made by Finance Minister Jeroen Dijsselbloem. The announcement was made after the British Prime Minister said that the UK may cut back on its corporate taxes to become a more attractive business destination. After the Brexit, British companies have considered relocating to the Netherlands or other EU countries.
Tax cuts in small stages
The Netherlands would also be able to reduce its corporate tax
rate but this stage would have to take place in stages, in the coming years. The change would be possible after the measures to cut tax avoidance start taking effect. The statement made by Minister Jeroen Dijsselbloem is also important from a political point of view: corporate taxation in the country has been a sensitive issue with his party, the Labor Party, PvdA.
According to experts, every corporate tax percentage cut would cost the Dutch treasury some 590 million euros.
The reduction would reinforce Netherlands’s position in Europe even in the eventuality of the tax cut performed by the UK. Holland offers a very good taxation regime, complete with tax incentives for businesses.
Foreign companies in the Netherlands benefits from all of the tax and investment incentives as local corporations. One of the experts at our Dutch law firm can give you detailed information about the legislation for foreign investments.
Taxation in the Netherlands
The Netherlands has a competitive fiscal and business climate. The current corporate income tax is 25% for profits that exceed 200,000 EUR and only 20% for the first 200,000 EUR. There is no surtax and no alternative minimum tax. A participation exemption is applicable in the Netherlands for capital gains and dividends derived from shareholdings of at least 5%, under several conditions.