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Dutch Senate Approves 2021 Tax Changes

Tuesday, December 22, 2020

The Dutch Senate has approved the 2021 Tax Plan package, which introduces a lower rate of corporate tax for small- and medium-sized businesses.

The package includes the introduction of a 15 percent rate of corporate tax for SMEs on income up to EUR245,000, down from 16.5 percent on income up to EUR200,000.

A new 25 percent rate of withholding tax will apply to Netherlands-source royalties and interest payments to entities in territories with a corporate tax rate of under nine percent, as well as to jurisdictions on the European Union's blacklist of non-cooperative territories for tax purposes, even if the country has a tax treaty with the Netherlands.

The package also introduces a new Job-related Investment Discount (BIK), featuring a 3.9 percent credit for investments up to EUR5m on such items as new machinery and a 1.8 percent credit on investments above that threshold.

A new exemption from one-off transfer tax will be introduced from January 1, 2021, for those aged under 35 who purchase a house for use as a personal dwelling. From April 1, 2021, the exemption will be limited to houses worth not more than EUR400,000. A higher rate of transfer tax will be introduced for other buyers of eight percent.

The self-employed deduction will be gradually phased out in the coming years. As of January 1, 2021, the self-employed deduction will be reduced from EUR7,030 to EUR6,670.