Dutch Government Announces 2019 Tax Plan Including Steps To Combat Tax Avoidance And Improve Dutch Business Climate

; posted on
September 20th, 2018

The Dutch Government released Tax Plan 2019. Two of the main purposes are to prevent international tax avoidance and tax evasion and to attract international business to contribute to the economy:

1. Anti-Tax Avoidance

Under the CFC rules introduced in the Tax Plan, a Dutch company which has directly or indirectly more than 50% of the shares or voting rights in a foreign company may be taxed on the income of this foreign company. The CFC rules only apply to certain passive incomes like interest, royalties, dividends and etc., if this CFC is subject to a statuary tax rate of less than 7% or if the CFC is resident in the EU list of non-cooperative jurisdictions.

The Tax Plan also proposes interest deduction limitation. The interest is not deductible for the amount that exceeds the higher of

  • 30% of the earnings before interest tax depreciation and amortization (EBITDA)

2. Reduction of Corporation Tax Rate

The corporation tax rate for the profits of up to €200,000 will be reduced in steps from 20% to 19% in 2019, to 17.5% in 2020 and 16% as from 2021. For the profits above €200,000, the applicable corporate tax rate will be reduced from 25% to 24.3% in 2019, to 23.5% in 2020 and 22.25% as from 2021.

Source: Dutch Government

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