2018 Tax Plan adopted by House of Representatives | Deloitte

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2018 Tax Plan adopted by House of Representatives

Tax Plan 2018 - Budget Day (Prinsjesdag)

The House of Representatives has agreed to the 2018 Tax Plan package on 23 November 2017 and to the phase-out of deductions due to no or a minor home acquisition debt. This was subject to the adoption of several amendments.

29 November 2017

2018 Tax Plan

Having implemented several amendments, the House of Representatives adopted all bills included in the 2018 Tax Plan package on 23 November 2017. Parliament likewise agreed to the gradual phase out of the deduction due to no or a minor home acquisition debt (the “Hillenregeling”). This deductible item will be reduced by 3.33% every year, until the regulation terminates in 2048. The following lists the amendments introduced by the House of Representatives.

VAT

Zero rate for seagoing vessels

The VAT Directive obliges EU Member States to apply the zero rate for the supply of vessels that are used on the open seas for passenger transport against payment, freight transport, fishery and such. This likewise applies to various services relating to those vessels. The looming threat of infringement proceedings prompted the legislature to propose earlier implementation of the restriction of the zero rate, applicable to seagoing vessels designated to navigate the high seas for 90% or more. On the back of criticism from the House of Representatives the legislature adopted a memorandum of amendment reducing this rate to 70%. What’s more, the House of Representatives has adopted an amendment according to which the restriction of the zero rate will become effective a year later (on 1 January 2019). In exchange for this the tobacco excise duty will be raised in 2018, to a higher level than had initially been anticipated.


Liabilities for pledgees, mortgage holders or executors

When pledgees, mortgage holders or executors sell goods on behalf of the owners, they can also recover the VAT proceeds. In an effort to prevent the government from missing out on VAT revenues for an even longer period, a joint and several liability for pledgees, mortgage holders and executors will be implemented on 1 January 2018. The House of Representatives has adopted an amendment, though, stipulating that shareholders, mortgage holders and executors will only be liable if they could have known that the tax debtor would fail to pay the VAT due.

Procedural tax law

Voluntary disclosure scheme is only cancelled for foreign box 3 income

The government had proposed to fully cancel the voluntary disclosure scheme as at 1 January 2018. Any voluntary disclosure within two years after filing an incorrect or incomplete tax return could then still result in offense penalties, at least provided it involves wilful misconduct or gross negligence by the taxpayer. The House of Representatives considers this is taking things too far, though. It has thus adopted an amendment as a result of which the voluntary disclosure scheme is only cancelled with respect to non-disclosed income from savings and investments (box 3) that has been generated abroad.

Collection

Simplified third-party debt orders

Provided certain conditions are met, Tax Collectors can issue third-party debt orders. In some cases they can do so under simplified procedures, for instance, to attach back wages or account credit balances. One of the advantages of the simplified procedure is that it does not require a bailiff’s notification. The government wanted to open the simplified procedure for other monetary receivables as well, effective 1 January 2019. The House of Representatives has determined, though, that the measure can only become effective when the protected earnings level is respected. As yet it is not clear when that will be.


Cancellation of suspensive effect has been delayed

If tax debtors disagree with enforcement of a writ of execution they can file an objection with the civil court. Such objections have a suspensive effect, so the enforcement of the writ of execution will be suspended until the court has decided on the objection. If the government has its way, this suspensive effect will be cancelled on 1 January 2018. In their mind the procedure for lodging an objection is mostly used to delay the collection process. Although the House of Representatives has agreed to this measure, it has ensured that the legislative amendment will be evaluated after three years.

Income tax

Multiplier deduction for gifts

An increased deduction for gifts for income tax and corporate income tax purposes has been in place since 1 January 2012, relating to gifts to cultural institutions. Although this temporary incentive was to be abolished on 1 January 2018, the House of Representatives has decided to finally write into law the “cultural multiplier” in respect of deductions for gifts.

Gift and inheritance tax

Donation upon amendment to matrimonial property system

The government had proposed a statutory regulation to determine whether a change in matrimonial property system results in a gift between spouses. The assumption is that bringing about equal entitlement to the joint capital does not lead to taxation. However, gift tax would be due if the share of the spouse with the smallest part of the capital were to increase up to over 50%, or the share in the total capital of the spouse with the largest part of the capital were to increase. The House of Representatives cancelled this part of the “2018 Other tax measures” and called for the government to come up with a fairer regulation that does not affect well-intentioned citizens.

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