State Secretary answers questions on tax policy agenda | Deloitte Nederland

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State Secretary answers questions on tax policy agenda

The State Secretary for Finance recently answered questions from the House of Representatives on the government’s tax policy agenda.

30 May 2018

Tax policy agenda

We already informed you about the policy agenda which the State Secretary sent to the House of Representatives last February. This agenda particularly focussed on combatting tax avoidance and tax evasion. The approach presented includes protection of the Dutch tax base and measures relating to transparency and integrity.

The State Secretary answered questions about this tax policy agenda in a recent letter to the House of Representatives. The questions among other things addressed the approach to tax avoidance and tax evasion, and the attractiveness of the Dutch establishment climate.

Approach to tax avoidance and tax evasion

The State Secretary started by saying that the government attaches equal importance to the approach to tax avoidance and tax evasion and providing for an attractive establishment climate. As the government wishes to send a clear message abroad, it has written a separate letter on the approach to tax avoidance and tax evasion.

The State Secretary also discusses the timing of the various measures taken in this area. The bills on the implementation of ATAD 1 and the emergency repair measures for the fiscal unity regime are scheduled to be submitted to the House of Representatives before the summer recess. The 2019 Tax Plan package that will be presented to the House of Representatives on Budget Day provides for the conditional withholding tax on dividends. Next year, the bills on the implementation of ATAD 2, the conditional withholding tax on interest and royalties, the introduction of the minimum capital rule, and the restatement of the right of non-disclosure for tax purposes will be presented to the Parliament for approval. On top of that, implementation of the mandatory disclosure directive is being prepared.

Attractive establishment climate

The State Secretary also discusses the fiscal unity repair measures announced earlier (on which we also informed you already). He indicates that these should be succeeded by a future proof group scheme. The various possibilities are now being studied. However, a cross-border fiscal unity (with full exemption) is not an option for the government.

The State Secretary indicates that consultations with the business community, stakeholder groups and scientists will take place in the second half of 2018. The outcomes of these consultations will be included in an option document that will be presented for internet consultation in the first half of 2019. A draft bill will subsequently be prepared that will likely be published for internet consultation mid 2020. Only then a final bill will be submitted to the House of Representatives. So for the time being, the precise shape and form of the future proof group scheme are still shrouded in mystery.

Substantial interest

The State Secretary concludes by indicating that he is aware that the proposed increase in the substantial interest rate (box 2) will also apply for retained earnings accumulated in the past that will be distributed in the future. Yet transitional provisions are out of the question. Not only because these will be very difficult to implement but also because such provisions are uncommon for rate hikes. The State Secretary further points out that majority shareholder-directors have the possibility to delay taxation for a long time, or to accelerate it.

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