Dutch Tax Plan 2019 - Government Amends Several Measures

; posted on
October 16th, 2018

The State Secretary for Finance published a letter regarding amendments to the Tax Plan 2019 (the tax plan), to strengthen the business climate in the Netherlands.

These are the following adjustments to the corporate income tax measures:

Dividend Withholding Tax

The government decided to maintain the current dividend withholding tax, which is 15% on dividend distributions (including its broad exemptions, often effectively only imposed on individual shareholders or corporate shareholders holding an interest of less than 5%). Additionally, the cabinet will revisit and postponed the conditional dividend withholding tax on distributions (and in certain cases capital gains) to related companies that are tax resident in a jurisdiction with a low-tax rate.

Due to the decision to retain dividend withholding tax, the measure of “direct investments in real estate by investment funds” will not be introduced.

CIT Rate

In 2019, the CIT rate will not be reduced to 24.3% but will be retained in the standard rate, which is 25%. In 2021, the CIT rate for the first €200,000 profits will be reduced from 20% to 15% (instead of the previously announced 16%).

Transitional regime relating to fiscal unity

The transitional regime relating to the fiscal unity will apply retroactively to loans from 1 January 2018, but not to loans existing on 25 October 2017 at 11 am.

Depreciation of buildings for own use

Government introduces a three-year grandfathering period for real estate acquired prior to 1 January 2019 that is depreciated for less than three years.

Transitional regime concerning 30% ruling

Initially, the tax plan provided a reduction of the maximum period applicable to the 30% ruling from 8 to 5 years with effect from 1 January 2019. This maximum period will continue to apply. However, foreign highly qualified employees who are temporarily assigned to the Netherlands and would not be eligible for the ruling in 2019 or 2020 can still benefit from the ruling in those years.

The Dutch Government is aiming to have the above amendment proposals as part of the voting on the 2019 Budget Proposals scheduled for 15 November 2018. In the meantime, they are still subject to further possible amendments.

Sources: De Tweedekamer , Dutchnews

 

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