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A look ahead: Dutch tax plans for 2015


On 16 September 2014, the Dutch Government presented its annual budget, which included the tax plan for 2015. Taxand Netherlands provides an overview of the main changes to be introduced in 2015 and the impact on the corporate sector, as well as on individuals. 

Corporate income tax
Compared to previous years the implications for the corporate sector as a result of the proposed changes should be relatively limited. No changes have been proposed for, for example, interest deductions, hybrid loans or the participation exemption. Most changes are focused on reducing the overall taxation on labour. It is expected that separate proposals will be introduced on items such as the Dutch fiscal unity regime. An overview of the main proposed changes is provided below:

  • As of 1 January 2015 foreign fines will no longer be deductible for income tax purposes. Differences in treatment between domestic and foreign fines will therefore be eliminated
  • The restriction on the deductibility of fines applies to all fines including the fines imposed under criminal law, disciplinary law and administrative law, as well as settlements concluded with foreign governments. This is especially relevant for fines imposed by the European Union (EU) or foreign authorities such as the United States Securities and Exchange Commission. When a penalty is imposed abroad for an offence that is not recognised by the Dutch legal system and is clearly in conflict with Dutch law, consideration will be given to allowing deduction of the penalty imposed by virtue of the hardship clause
  • It is proposed that as of as of 1 January 2014, interest paid on (hybrid) tier 1 capital instruments is considered deductible for banks. This will also be applicable for insurance companies as of 1 January 2015. The remuneration on those instruments will be tax deductible at the level of the bank/insurance companies under certain conditions and is taxable at the level of the (Dutch) recipient
  • As from 2016, Dutch legal entities under public law (government owned enterprises) will be subject to corporate income tax to the extent that they carry on an enterprise. The individual enterprises of central government will also become taxpayers. Exemptions will apply under certain conditions, for example for academic hospitals, educational institutions and seaports
  • At the moment, the rules concerning interest on tax due do not apply to dividend withholding tax. It is proposed that from 1 January 2015 this will be changed and dividend withholding tax will also be brought within the scope of interest on tax due. Late payments of dividend withholding tax will therefore no longer be exempt from these rules
  • The opposite also applies - as from 1 January 2015 the tax authorities will pay interest on refunds of dividend withholding tax. These new rules apply with effect from 1 January 2015 but will have retroactive effect to earlier years. In cases where tax is levied contrary to EU law and as a result a refund exists, the Dutch tax authorities will in future, upon request, reimburse late payment interest

Personal income tax and wage tax

  • As of 1 January 2015, employers are obliged to apply the Work-Related Costs scheme (Werkkostenregeling, hereafter WKR). Based on the WKR all reimbursements paid and benefits provided will be regarded as taxable wages. Employers can only reimburse a fixed percentage of the total gross yearly wages for reimbursements and benefits free of taxes. The fixed forfeiter exemption will be 1.2% of the total fiscal wages for Dutch wage tax purposes (2014: 1.5%). If employers reimburse and/or provide benefits exceeding this fixed exemption, the excess is subject to a 80% final tax charge which will have to be paid by the employer. Specific exemptions and specific valuations apply for certain benefits and allowances
  • If a person works for a company in which they or their partner holds a substantial interest of more than 5% of the shares, that person will qualify as a director/substantial shareholder. To establish the director’s accustomed salary, a special accustomed salary scheme should be applied. As of 1 January 2015 the minimum salary to take into account for Dutch wage tax purposes must be established by comparing the wage of a normal employee with the most comparable employment activities instead of similar employment activities. Also the ‘efficiency margin’ will be reduced from 30% to 25%. As a result the director’s salary should at least be 75% of the salary of the employee with a comparable employment function
  • Under the current legislation a mortgage debt that remains after a principal residence has been sold is deductible for personal income tax purposes for a period of 10 years. It is proposed to increase the 10 year period to a 15 year period. Interest on vacant unsold former principal residences, or future principal residences, will be deductible for a period of 3 years. This was a temporary arrangement which will be made structurally. Also under the current proposal it will remain possible to deduct mortgage interest on principal residences that were temporarily rented out

Your Taxand contact for further queries is:
Marc Sanders
T. +31 20 435 6400

Taxand's Take

The tax plan for 2015 does not include major changes to Dutch tax law. The implications of the proposed changes for the corporate sector in the Netherlands should therefore be limited. The government has decided to elect for stability in corporate tax and has not taken any unilateral measures as a result of OECD base erosion and profit shifting (BEPS) proposals or the amendment of the EU parent-subsidiary directive on hybrid loans. It is expected that separate proposals will be introduced at a later stage on items such as the Dutch fiscal unity regime.

Taxand's Take Author

Marc Sanders
Taxand Board member

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