Budget Day Special
The 2019 Tax Plan should rightly be called a ‘policy-rich tax plan’, after a ‘policy-poor tax plan’ last year. The tax plan contains the necessary measures from the 2017–2021 Coalition Agreement entitled ‘Trust in the Future’ and the Tax Policy Agenda.
The following measures in particular are the most striking. Pole position naturally goes to the abolition of the dividend tax, which was included in the plans despite significant opposition in society. This abolition does go hand in hand, however, with the introduction of a withholding tax on dividends payable to low-tax jurisdictions and in situations of abuse. In this case, the rate is equal to the corporation tax rate. Furthermore, the previously announced transposition into Dutch law of ATAD1 (the Anti-Tax Avoidance Directive) is included as a separate bill.
The most relevant point for businesses is that the corporation tax rate is being reduced incrementally, and the tax rate applied to substantial interests under the income tax regime is gradually being increased. Surprisingly, the Annual Budget states that the Cabinet is going to be discouraging tax deferral by starting to tax, in box 2, loans to the director/major shareholder from his own BV (private limited company) above €500,000. However, the published bills and explanatory memoranda contain no specific provisions concerning this.
For private individuals, one striking feature is that it will only be possible to enjoy deductions at the low rate from now on. On a positive note, we have the rate reduction, the introduction of a two-bracket system, and a general reduction of taxation of labour income. The last striking element is the bill entitled ‘Fiscal Greening Measures’, in which the Cabinet is focusing on greening and increasing sustainability.
Below, we have listed for you the most important topics and added our comments. You can contact your usual PKF Wallast advisor for questions or further explanations.