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Netherlands: Proposals to improve, simplify tax system

Netherlands: Proposals to improve, simplify tax system

A package of tax proposals—referred to as the “Building Blocks for a Better Tax System” (Bouwstenen voor een beter belastingstelsel)—was published on 18 May 2020.

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This package of reports is the result of an initiative for specific building blocks and proposals for improvements and simplifications to the tax system, as originally put forward in September 2018 by the previous Deputy Minister of Finance. 

The reports (that contain more than 1,000 pages of text) have resulted in 169 detailed policy options concerning a large number of taxes—options that in certain instances would be diametrically opposed. The reports reflect policy options proposed by officials at the Ministry of Finance, and that can be used by a new government given that the recommendations will not be enacted into law this year.

The detailed policy options would become part of the various election manifestos and will play a significant role in the formation of a new government after the national election in 2021.

While this relates to future actions, it may nevertheless be worthwhile to examine the proposed policy options. Based on this, taxpayers may be able to take certain steps and anticipate any future changes—in particular, regarding proposals for tightening or even repealing current tax concessions.

There are 169 measures presented by the Ministry of Finance, including measures to address problems with the current “box system” in the individual (personal) income tax regime, the tax on the transfer of assets (gifts and inheritance), the taxation of corporate profits, and the role of tax in health and climate matters. With regard to the taxation of corporate profits, the policy options would adopt measures appearing in the report by the Ter Haar Committee (April 2020).


Read a May 2020 report prepared by the KPMG member firm in the Netherlands

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