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Dutch cabinet hints at lower corporate tax rate in coming years
[AMSTERDAM] The Dutch deputy finance minister hinted that the country would work to further cut the corporate tax rate in the coming years, a bid to keep pace with neighbouring countries looking to attract foreign businesses after the Brexit vote.
"We do not want to lose competitiveness compared to other countries, but we will not be the discounter of Europe," Eric Wiebes said at a press conference in the Hague after the presentation of the annual budget.
Mr Wiebes on Tuesday raised the amount of profit to be taxed at the lowest rate of 20 per cent, a move intended to help small and mid-sized companies. That measure is "just an appetiser," he said.
National tax rates have become a bigger issue in the European Union after the UK voted to leave on June 23. The Netherlands competes with Ireland, the UK and other locations to attract multinationals and the jobs they bring.
Ireland has a rate of 12.5 per cent on trading income while the Netherlands' currently taxes all profit over 200,000 euros (S$304,550) at 25 per cent, according to Deloitte.
Belgium plans to scrap deductions and cut its corporate income tax rate to 20 per cent by 2020, Bloomberg BNA reported last month. The new measure announced by Mr Wiebes Tuesday will raise the amount of profit taxed at that rate to 350,000 euros by 2021.
New Dutch measures weren't announced by the government in Tuesday's budget because it didn't yet know how to make up for the shortfall, Finance Minister Jeroen Dijsselbloem said.
Still, Mr Wiebes also urged caution, saying the Netherlands has no plans to match Ireland: "We will not inflame the competitive battle on corporate tax. We will not be a frontrunner."