By Jian-Cheng Ku and Rhys Bane
In September, the Dutch government published an initial round of tax proposals in connection with the 2019 Budget. One of these proposals, the Source Tax Act of 2020 (STA 2020), would, among other things, see the Dutch dividend withholding tax abolished and a source tax on dividends (as of 2020), interest and royalties (as of 2021) introduced. Furthermore, the STA 2020 would see Dutch corporate income tax rates lowered to 16 percent for taxable profits of up to €200,000 and 22.25 percent for taxable profits in excess of €200,000. These proposals were announced on September 15, 2018.
Then, on October 5, 2018, the Dutch government announced it was reconsidering its proposals for the improvement of the Dutch investment climate. On October 15, in a letter from the State Secretary of Finance to Parliament, the government announced the results of this reconsideration.
Rather than abolishing the Dutch dividend withholding tax, the government is proposing 10 changes to the pending tax proposals.
Internationally operating companies with a Dutch company in their corporate structure are making note of the proposals.
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