The new coalition government in The Netherlands has published a policy paper outlining its policy for the next four years. The policy paper proposes changes to the current tax regime to offer a competitive tax investment climate for companies while also addressing developments on tax avoidance.

There is a proposal to reduce the general corporate tax from the current 25% to 21% by 2021. The paper also introduces plans to abolish the 15% withholding tax on dividend distributions by limited liability companies. Additionally, there are plans to introduce withholding tax on interest and royalty payments in artificial structures, typically involving a low tax jurisdiction, in line with the EU initiative to introduce a blacklist of non-cooperative tax jurisdictions. Further, to comply with the minimum measures from the European anti-tax avoidance directive (ATAD), the policy paper includes an interest deduction limitation rule in the form of an earnings-stripping rule. For further information, please contact Paul Hale.