A majority of MPs support junior finance minister Frans Weekers’ plan to limit tax deductions for private equity groups which saddle their new acquisitions with large debts, the Financieele Dagblad reports.
MPs from the ruling alliance want to introduce the measure next year, meaning there would be no gradual changeover. Tax experts told the Financieele Dagblad last week this could leave some companies in financial difficulty.
Weekers wants to end the abuse of the tax break which allows foreign companies to reduce the tax they pay on their profits by deducting the interest on debts from the gross profit total.
Research by the Volkskrant last year showed companies such as NXP, Hema and Ziggo had been loaded with debt by their new owners. By deducting the interest from earnings, the companies make a loss on paper and have to pay very little tax.
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