Tax Lawyers / Fiscalisten

Tuesday, 10 October 2017

New government proposes new tax reforms

Today, on 10 October 2017, Prime Minister Mark Rutte released the highlights of the new government (Rutte III). As far as taxation is concerned the most important changes are:   

  • The statutory corporate income tax rate will gradually decrease with 4% to 16% for the first EUR 200,000 in profits and 21% on the excess
  • Dividend withholding tax will be abolished except for distributions to low tax jurisdictions and in abusive situations
  • Introduction of a withholding tax on interest and royalty payments to low tax jurisdictions, as of 2023
  • Introduction of a black list of non-cooperative jurisdictions
  • Effective tax rate for innovation box profits will increase to 7% (currently 5%)
  • The outlines for the earning stripping rules under ATAD are set at: maximum deductibility 30% of EBITDA with a threshold of EUR 1,000,000 (and no group escape)
  • Period 30% ruling for expats will be limited to 5 years (currently 8 years)
  • Loss carry forward period restricted to 6 years (currently 9 years)
  • Dutch REITs (in Dutch: FBIs) may no longer invest directly in real property

So far, the new government only published the highlights. No details are known yet (e.g. what is a ‘low tax jurisdiction’ and what will be the withholding tax rate on interest and royalty payments). We expect the first legislative proposals in the course of 2018, such that new measures will become effective as of 2019 or in later years. 

Ivo Kuipers

Partner
Amsterdam

Pieter Frolichs

Associate
Amsterdam

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