On October 10, the four Dutch political parties that will form a coalition for the Netherlands' next government released the coalition agreement. The coalition, to be lead by Mr. Mark Rutte on behalf of the Liberal Party (VVD), agreed to advance extensive corporate tax reforms in support of the Dutch investment climate.
Key items of the tax reform include a reduction of the corporate tax rate from 25% today to 21% in 2021 and the abolishment of dividend withholding tax in 2019. These significant improvements mark a departure from the political stalemate of the last years and are indicative of the commitment to foreign investors with substantive operations and headquarters in the Netherlands.
The American Chamber of Commerce in the Netherlands welcomes the new coalition's approach to fostering investment in the Netherlands. The reduced corporation tax rates and abolishment of dividend withholding tax signal that the country is open for business. In a rapidly harmonizing European tax environment, AmCham will continue to promote that a focus on real businesses with substantive operations and employees and very competitive head line tax rates is the best approach to make the Dutch investment climate sustainable for the future.
AmCham looks forward to the proposals to implement the reforms and calls on the new coalition to continue to apply Dutch style common-sense decision making when implementing tax legislation, whether domestic or in EU or OECD context. At all times, the guiding principle must be that profit is taxed only where the value is actually created. In combination with the reform now announced, the new coalition appears to be well placed to re-make the Netherlands the prime investment gateway to Europe and beyond.
