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Dutch Gov't Eyes Deeper Corporate Tax Cut

by Ulrika Lomas, Tax-News.com, Brussels

12 October 2016


The Netherlands' ruling VDD Party has said that it would seek to cut corporate tax for all companies if it retains power in the upcoming parliamentary elections.

Much emphasis was placed on increasing Dutch tax competitiveness in its recently unveiled manifesto, and the party said it would cut corporate tax for "small, medium, and large companies" to keep pace with the competition.

"Netherlands should be an attractive country with low taxes. Because in addition to our education, our infrastructure, our stability, and our cultural offerings, our taxes are an important reason for companies to settle in the Netherlands. Corporation tax in major neighboring countries is, however, lower," the manifesto said.

"We want to lower the corporate tax. That way we can compete with neighboring countries."

The manifesto pledge suggests that the VDD, currently the largest party in the governing coalition, would seek to go further than its previously announced corporate tax plans, which will increase the income ceiling for the 20 percent lower rate of corporate tax from its current level of EUR200,000 (USD222,0000) to EUR350,000 by 2021. Indeed, Prime Minister Mark Rutte has said in the past that the Netherlands' 25 percent headline rate of corporate tax is too high by international standards.

The manifesto also calls for a reduction in taxes on labor and a cut in capital gains tax. In addition, the VDD says that the Dutch tax system should be substantially simplified after growing overly complex.

While supporting international efforts to reduce tax evasion and aggressive tax avoidance, the party nevertheless opposes two important EU tax initiatives, namely the proposed financial transactions tax and the common consolidated corporate tax base, arguing that they are anti-competitive. "Such taxes [would] hurt our business climate, making jobs disappear," it said.

Elections to the 150-member lower house, the House of Representatives, are due to take place on March 15, 2017.

TAGS: capital gains tax (CGT) | tax | business | Netherlands | tax avoidance | corporation tax | education | standards | Tax | BEPS | Financial Transactions Tax (FTT)

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