Netherlands: Corporate Tax Plan 2019 Presented to Parliament

Local tax news

​On 18 September 2018, the Tax Plan 2019 and a bill to implement the EU Anti-Tax Avoidance Directive (EU) 2016/1164 were presented to the lower house of the parliament. The most important proposals are summarized below.
 
(i) CIT Rate: with effect from 1 January 2019, the corporate income tax rate will be 19% for taxable income up to EUR 200,000, and 24.3% on the excess (currently 20% and 25%, respectively). The rates will be further reduced to 17.5% and 23.9% (in 2020), 16% and 22.25% (in 2021), respectively.
 
(ii) Losses: the loss carry-forward will be reduced from 9 to 6 years from 2019.
 
(iii) GAAR: A GAAR, as required by the ATAD 1 Directive, will not be introduced because this requirement is deemed to be met by the fraus legis concept, developed under case law. This concept applies to constructions which are held to be against the aim and purpose of a law.
 
(iv) CFC: the Bill provides for the introduction of special CFC legislation for income generated by CFCs established (a) in jurisdictions with a statutory rate of less than 7% or (b) established in non-cooperative countries that are blacklisted by the EU. For the application of the CFC rules, a controlled company is defined as a company in which a company (alone or together with related persons) directly or indirectly holds and interest of more than 50% in the capital, voting rights or an entitlement to the profits.
 
(v) Earnings stripping rule: the net interest deduction will be restricted to the highest of: 30% of the earnings before EBITDA; or EUR 1 million.
 
(vi) Exit taxation: Currently companies which transfer the place of effective management to another EU Member State may pay the arising tax claim in 10 installments. Under the Bill, this period will be reduced to 5 years. The tax authorities may request that a guarantee is provided if the tax inspector deems it plausible that a serious risk exists that the tax claim cannot be collected.

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