Tax measures Coalition Agreement

12th of December | Door:  Jasper Gorter

On 10 October 2017 the Coalition Agreement was published. Alfa has listed the tax measures for you below. With this overview, we focus on internationally operating companies.

Corporate income tax

Reduction of corporate income tax rates

The new Government proposes to lower the current standard Dutch corporate income tax rate from 25% to 24% in 2019, to 22.5% in 2020 and to 21% as from 2021. Profits up to an amount of €200,000 are currently taxed against a lower step up rate of 20%. The new Government proposes to lower the step-up rate from 20% to 19% in 2019, to 17.5% in 2020 and to 16% as from 2021.

Restrictions of carryforward loss compensation

Currently, tax losses may be carried forward for nine years and/or carried back for one year. The new Dutch Government plans to limit the carryforward from nine years to six years. The coalition agreement does not state a precise effective date for this.

Increase of effective tax rate innovation box regime

The Dutch innovation box regime, a beneficial intellectual property regime, currently allows qualifying research and development profits to be taxed at an effective tax rate of 5%. The new Government plans to increase the effective tax rate to 7% as of 2018.

Withholding taxes

Elimination of Dutch dividend withholding tax

The Paper introduces plans to eliminate the 15% withholding tax on dividend distributions. However, dividend distributions in abusive situations and to low-tax jurisdictions would become subject to a withholding tax. Although the coalition agreement itself does not state when this will take effect, according to the underlying documents the abolition is set to be introduced as of 2020.

Withholding tax on interest and royalties

Currently, the Netherlands does not levy withholding tax on interest and royalties. The new Dutch Government plans to introduce withholding tax on interest and royalties on payments from Dutch taxpayers to low-tax jurisdictions as of 2023. This may be seen in context of the initiative taken at the EU-level to prepare a blacklist for non-cooperative tax jurisdictions before year-end.

Wage tax

30% ruling

The maximum term for 30% rulings (from which foreign qualified employees can benefit when relocating to the Netherlands) will be reduced from 8 years to 5 years as of 2019. 30% rulings do not only reduce the effective tax rate on employment income, but also allow keeping net wealth effectively outside the Dutch tax jurisdiction.