The Dutch Government presented the new tax measures for the tax year 2020. The most important items are:
- Reduction of corporate income tax rates
The lower basic corporate income tax (CIT) rate over the first EUR 200,000 of profit will be reduced from 19% to 16.5% in 2020 and to 15% in 2021. The main CIT rate (for profits exceeding EUR 200,000) will be decreased from 25% to 21.7% in 2021.
- Introduction of conditional interest & royalty withholding tax
As per 2021 a conditional withholding tax will be introduced on interest and royalty payments effectively paid to low tax jurisdictions (<9% CIT), EU blacklisted jurisdictions or in abusive situations.
- Amendment of anti-abuse provisions
Dutch anti-abuse provisions will be amended in order to align the Dutch anti-abuse rules with case law issued by the Court of Justice of the European Union.
- Definition of "permanent establishment"
A new definition of "Permanent Establishment" compatible with the PE definition of the 2017 OECD Model Convention and the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI).
- Earning stripping rules
Dutch tax inspector has the authority to formalize the amount of non-deductible interests. It is now proposed that the decision may be revised by the tax inspector based on a new fact, bad faith or an error that is reasonably apparent to the taxpayer.