Issue 65 - 15th December, 2011
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Netherlands proposes changes to tax system for 2012
1. A new R&D incentive is to be introduced in the form of a reduction of a maximum of 40% corporate income tax payable on approved R&D projects which could lower a company’s tax bill up to 10%.
2. The minimum salary for the 30% rule for foreign workers has been reduced to Euro 35,000 for foreign knowledge workers. Academicians and young research workers(less than 30 years old) would have to earn Euro 26, 605 to qualify. The 30% rule would also apply to Dutch employees in their travel to designated areas in other parts of the world.
3. Interest on loans taken by a Dutch company for taking over a target can be taken as a tax deduction against the profits of the acquired company to the extent that the deductible interest is greater than 1 million Euro and that the debt of the holding is in excess of two times the adjusted equity of the holding company. The limitations on deductions do not apply if take over debt is less than 60% acquisition costs and this threshold reduces by 5% every year till it becomes 25% during 7 years.
4. Foreign permanent establishment results will be fully excluded from the Dutch tax base as they change to a territoriality system. Only losses due to closure of the foreign operation which cannot be set off against local taxes would be included in closure results of the holding company.
5. In the taxation of the income of non resident corporations from a Dutch company in which the foreign parent has more than 5 % interest, taxation laws would apply without exemption if substantial interest was not established in terms of business assets and it was set-up primarily to avoid Dutch or foreign tax.
6. If a cooperative was set up with the sole aim of avoiding Dutch tax slabs, it will be treated as a corporate identity and taxed as such.
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