November 8, 2018

We have informed you earlier on the intention of the Dutch government to abolish the Dividend Withholding Tax (DWT) in the Netherlands. This came with costs of about 1.9 billion euro. There was fierce opposition to this plan.

One of the main arguments for abolishment of the DWT was to get multinationals – like Unilever - to move their headquarters to the Netherlands. When it became clear that the British shareholders of Unilever would vote against a proposal of the board to have the (only) headquarters in the Netherlands and the board withdrew the proposal, also the Dutch government’s plan to abolish the DWT has been withdrawn. So far the bad news. This however comes with good – or maybe even better - news too. The government already had the plan to gradually reduce the Corporate Income Tax (CIT) for large enterprises from the current 25% to 22.5% and for small and medium-sized enterprises from the current 20% to 16%. There is now an agreement between the coalition parties to gradually reduce the CIT to respectively 20.5% and 15%.

Other positive tax measures include: reduction of employers’ taxes and tax benefits for innovative enterprises which invest in research and development. Abolishment of the Dutch DWT mainly benefitted shareholders who could not deduct the Dutch DWT from their CIT in their country of residence. However, a broader range of companies and shareholders will benefit from the newly agreed on measures. We will keep you updated on these issues.

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