(a) Withholding tax percentage may be decreased under application of double tax treaties.
The overhaul of the country's interest deduction rules has been an important topic in the Netherlands this year. There is a consultation happening at the moment to try and gauge public reaction to proposals which will introduce a mandatory interest box, ...
[more]
The overhaul of the country's interest deduction rules has been an important topic in the Netherlands this year. There is a consultation happening at the moment to try and gauge public reaction to proposals which will introduce a mandatory interest box, which exempts or considers non-deductible 80% of the balance of intercompany interest received or paid. The box offers Dutch multinationals the opportunity to bring their treasury operations back to the Netherlands. This is a controversial topic as Dutch multinationals will benefit while foreign Dutch subsidiaries with intercompany loans not externally financed will suffer an increase of their effective tax rate. "There will be a lot of pressure from all types of groups including tax advisers and industry, to amend the proposal so that foreign multinationals can also benefit," one adviser said. While one practitioner criticised the complexity of the proposal, another said the government is "85-90% there but it still needs to do more to get flawless legislation".
Horizontal monitoring has also been a hot issue this year. This is when companies audit themselves rather than tax authorities auditing them on a regular basis. This concept began because of a shortage of people in the tax administration. Now the idea is for the authorities and taxpayers to be more open with each other.
The Dutch government has not introduced any big tax changes in response to the economic downturn. One adviser said: "The government has introduced some negligible measures to stimulate companies such as delaying VAT payments to quarterly rather than monthly. These are fringe benefits that particularly help smaller businesses' tax flow."
[hide]