Netherlands: Status of tax legislation for 2016

Netherlands: Status of tax legislation for 2016

The Deputy Minister of Finance on 8 December 2015 announced that an agreement had been reached, and that there was sufficient support to advance the “2016 Tax Plan” through the Upper House.

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In response to discussions, the Deputy Minister proposed additional measures for the 2016 Tax Plan.  These amendments will be presented to the Lower House as soon as possible in the form of a proposal to amend the bill (novelle).  Among the new measures are items concerning a labor tax credit, the tax credit for the elderly, and “Box 3” exempted capital. 

The measures from the novelle and the other measures are “covered” in the budget by reducing the tax rate in the second and third brackets for payroll tax and individual (personal) income tax purposes in 2016 by 0.2% points and in 2017 by 0.3% points (i.e., less when compared to the original bill). Under this plan, beginning 1 January 2016, the tax rate for the second and third brackets would be 40.4%.

Additional measures

On top of the novelle and the fourth memorandum of amendment, other additional measures include items concerning:

  • Investment in sustainable built environment
  • A plan for the phase out of coal-fired power plants
  • Changes to the childcare allowance
  • Expansion of the municipal tax area

What’s next?

With the cooperation of both Houses of Parliament, the Minister hopes that the novelle will be put to vote before the Christmas recess. The vote on the 2016 Tax Plan in the Upper House is scheduled for 22 December 2015.

 

Read a December 2015 report prepared by the KPMG member firm in the Netherlands: Sufficient support in the Upper House for the 2016 Tax Plan, proposal to amend the bill

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