The Netherlands’ government announced upcoming changes to withholding taxes.
This is one of several changes announced October 10, 2017—the government says it intends to reduce corporate income tax rates, further limit the interest deduction limitation rules for corporations and increase the effective Innovation Box tax rate to 7% (from 5%). The measures, which were presented as part of a "coalition agreement" as an indication of the incoming cabinet's priorities, do not replace the measures in the bills included with the Netherlands' 2018 budget that was presented in September. However, some of these measures would result in amendments or additions to those included in the budget bill. These new changes, which were not released with proposed legislation or further explanatory notes, could be introduced as legislative bills in 2018.
The Netherlands' new cabinet is expected to be sworn in during the week of October 23, 2017.
The new cabinet says it intends to abolish Dutch dividend withholding tax, except in abusive situations, or in the case of distributions to low-tax jurisdictions, starting in 2020. The new cabinet also proposes to introduce a withholding tax on interest and royalties paid to low-tax jurisdictions, expected to take effect as of 2023. These measures are different from those included in the 2018 budget bill, which expand the scope of the dividend withholding exception and extend the dividend withholding obligation to certain co-operatives.
The announced measures include changes to:
For more information, contact your KPMG adviser.
Information is current to October 17, 2017. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500