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Dividend tax to remain

Monique Pisters Monique Pisters

The dividend tax will not be abolished after all. The 1.9 billion euros it generates annually will go to Dutch business. Read the summary of the tax measures that should improve the attractiveness of the Netherlands as a business location.

Some of the tax measures:

  1. Further reduction in corporation tax rate
    The high corporation tax rate will be reduced from 22.25 percent to 20.5 percent with effect from 2021. The reduction of the high corporation tax rate envisaged in the coalition agreement for 2019 will be postponed, with the rate in that year remaining at 25 percent.

    The cabinet will reduce the low corporation tax bracket on profit up to EUR 200,000 in phases from 16 percent to 15 percent in 2021 as a further boost for SMEs.

  2. Transitional law with respect to limiting the depreciation of buildings against corporation tax
    There will be a transitional law to mitigate the effects of the limiting of the potential for depreciation of buildings in the company's own use. If the building was occupied by the taxpayer prior to 1 January 2019 and depreciation has been applied to the building for less than three years, the taxpayer may continue to apply depreciation as under the previous regime for these three years.

    In such cases, it makes no difference whether the carrying amount comes to less than 100 percent of the WOZ value as a result. Obviously, the current limit of 50 percent of the WOZ value still applies (as under current legislation).

  3. Shorter retroactive effect to pending legislative repair measures to the fiscal unity
    The retro-active affect of certain pending legislative repair measures to the Dutch fiscal unity regime would apply to 25 October 2017. This retroactive effect will now be limited to 1 January 2018.

  4. Transitional law for shortening maximum term of 30% facility
    The plan to amend the 30% tax facility for expats by reducing the term from 8 to 5 years will be changed. There will be a transitional arrangement for workers whose facility would end in 2019 or 2020 as a result of the amendment.

  5. Withholding tax on royalties and interest
    The announced introduction of a withholding tax on interest and royalties to low-taxed entities and in abusive situations will not be affected by the fact that the Dutch dividend withholding tax will not be abolished. It is still the intention that such withholding tax will be introduced as of 1 January 2021.

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