Netherlands Introduces End Of Year Tax Measures

by Ulrika Lomas, Tax-News.com, Brussels

05 January 2010

The Netherlands government has announced a number of tax measures that will enter into force during 2010. The changes include more lenient taxation on inheritances and gifts, a change in taxation on cars, and an extension to the number of products subject to the reduced rate of value-added tax (VAT).

The changes to inheritance tax will mean that rates on inheritances and gifts are reduced from January 1, 2010, and exemption thresholds for partners and children are increased.

The tax regime with regard to vehicles is to be changed to an emissions-based system, levied upon purchase, with cars that are more environmentally-friendly subject to substantially less tax under the new system. Exemptions are also being introduced for cars that use green alternative energy sources, such as electricity.

The Netherlands government has also announced that the lower VAT rate of 6% will also now be applied to the renovation of housing, insulation, digital education information, and motor-rickshaws.

Also within its package of measures, the government has increased small scale investment allowances to small- and medium-enterprises.

To further support innovation and research and development, the government has confirmed the introduction of the innovation box scheme ‘Innovatiebox’, which will replace the existing patents box scheme ‘Octrooibox’. As a result, income derived from R&D will only be taxed at a rate of 5%, and the ceiling for the scheme will be removed.

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