The Dutch Gov­ern­ment re­con­siders the 2019 Tax Plan

19/10/2018

Contrary to the announcements on Budget Day, the Dutch government made public that the Dutch dividend withholding tax will not be abolished. In lieu thereof, it is proposed to further reduce the corporate income tax rate, to introduce measures to stimulate innovation and entrepreneurship and to grant a transition period for certain previously announced measures.   1. Measures with impact on international business  The following measures with impact on international business have been proposed:

  • The high corporate income tax rate will be reduced from 22,25% to 20,5% with effect from 2021. The high corporate income tax rate for 2019 remains 25%;
  • The low corporate income rate will be reduced from 16% to 15% with effect as from 2021;
  • A transition rule will apply with regard to the limitation of the depreciation on buildings used within the group;
  • A transition rule will apply with regard to the 30% facility for expats;
  • Fiscal investment institutions subject to a zero corporate income tax rate will still be permitted to invest directly in Dutch real estate.

2. The future of Dutch withholding taxes   The Dutch government decided to maintain the Dutch dividend withholding tax. As the Dutch dividend withholding tax correlates with the introduction of a withholding tax on dividend payments to low-tax jurisdictions, the introduction of the aforementioned tax will be postponed to examine the implications in more detail.   The envisaged introduction of a withholding tax on interest and royalties with effect as from 2021 will be maintained.

Authors

Alice-van-Vught-CMS-NL
Alice van Vught
Tax Lawyer
Amsterdam
Picture of Herman Boersen
Herman Boersen
Partner
Amsterdam