Dutch tax rate proposals for 2017

Dutch tax rate proposals for 2017

On 20 September, the annual Little’s Princes’s Day -traditionally known as the ‘tax rate proposal day’- took plage in The Hague. King Willem-Alexander from the Netherlands presented the Dutch proposals for law and tax regulations in 2017. The government strongly confirms its continued commitment to maintain the attractive features of the Dutch investment climate, for instance by reducing the corporate tax rate to a competitive level in the future, while proactively addressing tax avoidance. The Netherlands maintains innovation box while tightening specific interest deduction limitations and reconsidering dividend tax treatment of cooperatives.

We want to keep our clients and partners updated by presenting you a summary of the most important proposals. Although not all of the proposals will make it into official laws and regulations, we believe this could be very useful information for investors and entrepreneurs.

Income tax rate 2017
Taxed income over (€) but no more than (€) Rate 2017 (%)
1st bracket 19.982   8,90
2nd bracket 19.982 33.791 13,15
3rd bracket 33.791 67.072 40,80
4th bracket 67.072 52,00

The proposals include the following key changes:

  • the Dutch ‘innovation box’ regime will be aligned, which grants a 5% effective corporate tax rate, with international standards while preserving benefits for the majority of taxpayers;
  • amending specific interest deduction limitations to address certain artificial structures;
  • suggesting broader dividend tax exemptions for all types of companies, but imposing a withholding liability on Dutch cooperatives.

Although the proposed changes concerning the innovation box and interest deduction limitations may be amended during the course of the legislative process, it is expected that they will take effect as of 1 January 2017. The dividend tax amendments have yet to be introduced and are expected to take effect as of 1 January 2018.

For more information, click: Dutch tax rate proposals 2017

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