Cabinet tax boost plan under threat, fails to tempt company owners

The finance ministry’s plan to cut the 25% tax which limited company owners have to pay on dividends they take out of their company may well backfire, the Financieele Dagblad reports at the weekend.

The government hopes the three percentage point reduction will encourage company owners to give themselves additional dividend payouts totalling €8bn in 2014 and 2015. This, in turn, will generate  €1bn in extra tax towards its €6bn package to cut the budget deficit, ministers hope.

But research by TNS Nipo for the FD shows there is little enthusiasm for the measure. Just 4% of the 200 company owners polled said they would definitely take advantage of the temporary measure. And that will knock a large whole in ministers’ plans.

Rules

‘I certaintly won’t take avantage of the tax cut on dividends,’ Linda Woudstra of internet firm Regeltante told the paper. ‘This is the last thing that interests an entrepreneur at a time of crisis.’

‘That means I benefit by €3,000 if I take €100,000 out of my company now,’ one factory owner told the paper.

Brussels on Friday warned the Netherlands that it would accept the 2014 spending plans – which aim to cut the budget deficit to the required eurozone 3% –  even though there is no margin for error.

It is also unclear how many people who have put golden handshakes in a special holding bv will be encouraged by the tax cut to take their money out and spend it, the FD points out. The cabinet hopes that will contribute a further €1.2bn towards the austerity package.

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