Thursday 04 June 2020

New tax plans will be better for the economy, minister says


The government’s revised tax measures to boost the the Netherlands’ business climate will be better for economic growth than scrapping the tax on dividends, junior finance minister Menno Snel has told MPs.

Nevertheless, reducing or scrapping the tax on dividends should not be ruled out in the future, Snel said in his briefing, which was sent to parliament on Monday evening.

‘It remains a very attractive option to encourage foreign investors to come to the Netherlands,’ he said.

The government decided on Monday to scrap plans to abolish the tax on dividends, which would have cost €1.9bn a year and only have benefited foreign firms.

Now the bulk of the money which had been technically set aside to pay for dropping the dividend tax will go to reducing corporation tax from 25% to 20.5% in 2020, a year later than planned, Snel said.

30% ruling

A further €400m will compensate for the decision to have a transition period for international workers faced with losing the 30% ruling in 2019 and 2020. The way this will work in detail has not yet been made clear.

The government’s decision to put €1.9bn into industry has been criticised by opposition MPs, who say the money would have been better spent on healthcare and education.

Expat campaign groups have also said the two year transition period does not go far enough, because thousands of people who expected to receive the tax break for eight years will miss out.

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