Corporate tax cut, slated for 2021, may be delayed to help pay for coronavirus

Photo: Joep Poulssen
Photo: Joep Poulssen

The cabinet’s plans to cut corporate taxes from 25% to 21.7% next year maybe in doubt because of the impact of coronavirus on the government finances.

Both the AD and Financieele Dagblad say sources have suggested the tax cut may be postponed again to help pay for the crisis. Ministers had last year agreed to delay the tax cut for corporate earnings over €200,000 to 2021, after prime minister Mark Rutte criticised companies for failing to put up salaries.

The tax cut has already been passed in law, but sources suggest it will be looked at again, given the billions of euros of investment the government has made in protecting industry against the impact of coronavirus.

The four coalition parties had their first joint meeting since the break on Monday and were briefed by finance minister Wopke Hoekstra. Ministers are also beginning their meetings about the 2021 budget, which will be presented to parliament on the third Tuesday in September.

The government’s macro-economic think-tank CPB said on Monday that the economy has not shrunk as much as expected but warned that the contraction will last into 2021 if there is another lockdown.

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