Dutch (Corporate Income) Tax Plan 2021

On 15 September 2020 (Prinsjesdag), the Dutch government published the Tax Plan for 2021. Aside from proposals to amend the tax regime for 2021, investigations and consultations regarding further changes have been announced. The legislative proposals will be reviewed, first, by the Lower House of Parliament and then, by the Senate. If the proposals are accepted by both Houses of Parliament, the proposals will enter into effect on 1 January 2021.

28 Sep. '20 Neha Mohan

This post is a short update on the changes to the laws relating to direct-taxes taking effect in 2021 (proposed in the Tax Plan 2021 as well as some already ratified in 2020) that may be relevant for companies doing business in the Netherlands. The post also throws light on some proposals and consultations (that have been announced along with the Tax Plan 2021) that could become relevant in 2022 and the subsequent years.

Changes in tax rates with respect to CIT and the Innovation Box

The top CIT rate will remain 25%, while the lower CIT rate (applicable to the first EUR 245,000 of taxable profits) will be reduced to 15% (from 16.5% in 2020). The first bracket has therefore been extended from EUR 200,000 in 2020 to EUR 245,000 in 2021, and to EUR 395,000 in 2022. Companies may consider splitting up fiscal groups in order to benefit from the 10% difference between the top and lower CIT rates applicable in 2021. In doing so, there could possibly be a benefit of EUR 24,500 (in 2021)per company.

The effective tax rate for the Innovation Box regime will be 9% (which is a 2% increase from 2020). Companies can consider preparing for this by, for example, accounting for the release of a guarantee provision (if possible) in 2020.

Neha Mohan

Neha Mohan is a Tax Adviser at NovioTax.

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