Main tax proposals in the new Dutch coalition agreement

The main tax proposals included in the new Dutch four-party coalition agreement

On 15 December 2021, a new four-party coalition agreement between the Dutch centre-right liberals, the Dutch progressive liberals, the Dutch conservative Christian democrats and the Dutch centre Christian democrats, was agreed and published. The coalition agreement will form the basis for the legislative proposals expected to be submitted to parliament the coming years by the new Dutch government, which is currently being formed. Below, we have summarised the main tax proposals relevant for corporate taxpayers and real estate investors.

1. Dutch corporate income tax:

• Controlled foreign company regime:

  It is proposed to make the Dutch implementation of the European Commission’s anti-tax avoidance directive controlled foreign company (CFC) tax regime more stringent. Measures that are being considered include abolishing the exception for profits distributed by the CFC before the end of the tax year (under the current regime these remain out of scope), amending the determination of the taxable CFC income (by calculating it on the basis of the CFC’s commercial accounts), applying an effective rate test similar to the one applied under the participation exemption (currently only the statutory rate is relevant) and amending or abolishing the exception for real economic activities (such that effectively profits derived from active business enterprise activities are in scope as well).

• Other measures to broaden the corporate income tax base:

  A (further) broadening of the Dutch corporate income tax base is proposed to be achieved by implementing the OECD Pillar II rules in the Netherlands. In this respect, it is noted the European Commission is working on a directive to such effect, and that the Netherlands is expected to timely implement the rules included therein in conformity with such directive. Depending on the additional revenue to be derived from the implementation of these rules, further measures may be required such as amending the reduced 15% Dutch corporate income tax rate for profits not exceeding EUR 395,000 (2022 bracket), thereby also increasing the Dutch corporate income tax revenue.

2. Dutch real estate transfer tax:

The real estate transfer tax rate for acquisitions of commercial real estate and buy-to-let real estate is proposed to be increased from 8% to 9% effective as from 1 January 2023. In this respect, it is noted that this rate was already increased from 6% to 8% effective as from 1 January 2021.

3. Dutch landlord levy:

It has been proposed to abolish the Dutch landlord levy. This levy is typically levied from Dutch social housing corporations, but also from landlords with a social housing portfolio consisting of more than 50 social private residences.

For more information about the impact on the real estate sector please read the previous Real estate Alert.