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Netherlands Announces 2019 Fiscal Agenda

Friday, May 31, 2019

On May 28, 2019, Dutch State Secretary for Finance Menno Snel issued an update on the Government's 2019 fiscal agenda, which includes an outline of tax legislative proposals that the Government intends to submit to parliament in the remainder of the year.

According to the document, in the second quarter of 2019, the Government intends to submit the following proposals to parliament:

  • a bill for a minimum CO2 price for electricity generation;
  • a bill to introduce a national aviation tax; and
  • legislation implementing the second European Union Anti-Tax Avoidance Directive (ATAD 2) regarding hybrid mismatch arrangements.

In the third quarter of 2019, the following measures will be submitted to parliament:

  • a bill transposing the requirements of the EU directive on the mandatory disclosure of, and exchange of information on, tax avoidance arrangements;
  • a bill to tackle excessive deductions for intra-group borrowing; and
  • the 2020 Tax Plan, which includes proposals to introduce a conditional withholding tax on royalties and interest from 2021 paid to "tax havens" and the EU VAT rule quick fixes proposed by the EU, pending the implementation of the definitive VAT regime.

The four short-term VAT "quick fixes" cover:

  • Call-off stock. The proposals provide for a simplified and uniform treatment for call-off stock arrangements, where a vendor transfers stock to a warehouse at the disposal of a known acquirer in another member state;
  • The VAT identification number. To benefit from a VAT exemption for the intra-EU supply of goods, the identification number of the customer will become an additional condition;
  • Chain transactions. To enhance legal certainty in determining the VAT treatment of chain transactions, the proposals establish uniform criteria;
  • Proof of intra-EU supply. A common framework is proposed for the documentary evidence required to claim a VAT exemption for intra-EU supplies.

The Government will this year also consider measures to ease the taxation of stock options for start-up companies by deferring tax when options are converted into shares. The Government said that if an agreement is reached on these proposals a bill will be introduced on Budget Day in 2020.