Netherlands: Tax measures in coalition agreement | KPMG | GLOBAL

Netherlands: Tax measures included in coalition agreement

Netherlands: Tax measures in coalition agreement

A coalition agreement released 10 October 2017 reflects measures the new Cabinet intends to implement, and while it does not replace the bills in the “2018 Tax Plan,” some of the measures will result in amendments or additions to the 2018 Tax Plan.

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Corporate tax proposals

Among the tax measures intended to be effective as of 2019 are provisions to: 

  • Reduce the corporate income tax rates
  • Limit the interest deduction for corporate income tax purposes
  • Reduce or scale back loss set-offs
  • Increase the rate of the “innovation box” regime to 7%
  • Limit depreciation on buildings for the taxpayer’s own use
  • Repeal in part the dividend withholding tax 
  • Introduce measures for partial withholding tax on interest and royalties 
  • Repeal the ability of “fiscal investment institutions” (fiscale beleggingsinstellingen—FBIs) to make direct investments in property

Measures affecting individual taxpayers

Specifically concerning individual taxpayers, there are proposals that would:

  • Introduce a two-bracket regime with respect to “Box 1” for certain individual taxpayers
  • Provide that deductible items in Box 1 for individual taxpayers gradually would be reduced to the basic rate
  • Reduce the deduction for mortgage interest on taxpayer residences
  • Increase the “Box 2 rate” of individual income tax
  • Reduce the tax on savings and investment income in Box 3
  • Limit the period of years for the “30% ruling” 
  • Limit tax relief measures for entrepreneurs subject to individual income tax or self-employed persons without employees

Other tax proposals

Other tax proposals would:

  • Increase the “reduced” or “low” value added tax (VAT) rate to 9% (up from 6%)
  • Reform the pension system
  • Revise other tax measures including tax credit systems

 

Read an October 2017 report prepared by the KPMG member firm in the Netherlands

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