The Dutch senate approved more than 50 tax measures for individuals and businesses. The measures are part of the Tax Plan 2020.
The most important changes for corporates are as follows:
- In 2020, the corporate tax rate on profits up to €200,000 is reduced from 19 to 16.5 percent. The tax rate for profits above €200,000 remains at 25 percent;
- As of January 1, 2020, the hybrid mismatch measures (ATAD2) are implemented. The guidance contains measures against tax avoidance by international companies through hybrid mismatches. These hybrid mismatches arise when there are differences between countries in tax on profits. The hybrid mismatch measures prevent deduction without inclusion and double deduction. This is an important change for the Netherlands;
- As of January 1, 2020, an interest deduction limitation is introduced for banks and insurers, the so-called minimum capital rules. This limits the deduction of interest on loans received to the extent that the loan capital exceeds 92 percent of the total of the balance sheet;
- The scheme for small businesses is amended. Small business can opt for this scheme in case of annual turnover of maximum €20.000. These businesses are exempted from charging VAT and VAT administrative obligations, but are also disallowed from deducting input VAT. Not only natural persons can opt for the schema, but also legal persons;
- As of January 1, 2020, the VAT rate for electronically delivered books (e-books), newspapers and magazines, is reduced from 21 to 9 percent. This new rate also applies for downloadable audiobooks, sheet music, educational resources, and paid access to websites of newspapers, magazines or other journalistic platforms. As a result of this measure, there will not be a difference in VAT rate anymore between hardcopy newspapers, magazines and books and the electronic versions;
- As of January 2021, conditional withholding tax will be introduced and applied on interest and royalties to low-tax jurisdictions and in abusive situations. The conditional withholding tax will only apply to payments within the group. Part of this law is that as of January 1, 2020 some specific anti-abuse provisions in the corporate tax and the dividend tax will already be adjusted.