The Netherlands
Simplification and decrease of tax rates 2008
The Dutch government has introduced adjusted corporate income tax rates for the year 2008 to the extent that taxable profits up to an amount of EUR 250,000 will be taxed at 20% while higher profits will be taxed at 25.5%. In practice this means that the intermediate tax rate of 23% for profits between EUR 60.000 and EUR 250.000 disappears.
No increase of VAT rate
The previously announced proposal to increase the main VAT rate from 19% to 20% as from 1 January 2009 has been withdrawn. Therefore the main VAT rate will remain at the level of 19%.
Reduction of red tape upon incorporation of Dutch companies
Presently the incorporation of Dutch companies requires a declaration of no objection from the Ministry of Justice . This serves as an ex ante supervision on the integrity of the Dutch business community.
In practice this form of supervision created a significant administrative and time consuming burden for bona fide entrepreneurs. However it also lead to the abuse of foundations (for which a declaration of no objection is not required) and the use of foreign companies for Dutch business purposes.
The result was that the present form of supervision no longer guaranteed the level of integrity it was aiming for.
On 25 September the Dutch Minister of Justice announced that a bill shall be proposed in which this ex ante requirement will be replaced by a form of continuous supervision on Dutch companies throughout their lifecycle. This form of supervision will be based on a set of risk indicators such as changes in the composition of the board of directors, the amendment of the objectives of the companies or the retro-active transfer of shares in the capital of the company.
A legislative proposal of the above is expected shortly. The new form of supervision should come into effect by 1 January 2010.
Combined with the current proposals to make the Dutch corporate law more flexible (as described in our news flash of July 2007) this will further enhance the position of the Netherlands as a premier location for international business.
SEO Economic Research on Dutch Trust Industry
The above well known research institute published an extensive and world premier report on the Dutch Trust Industry. It emphasises the important role of the trust industry in the Dutch financial sector confirming the opinion that the Dutch trust sector in general offers high quality service for its international clientele . One of FTC Trust’s directors acted as 1 of the 9 members of the advisory committee to this research. The full report can be downloaded here
Luxembourg
Abolishment of capital contribution tax
Effective 1 January 2009 the capital contribution tax will be abolished. Currently the rate is 0.5%.
This measure is part of the budget for 2009 of the Luxembourg government and should enhance the international investment climate in Luxembourg.
We would be happy to serve you through our Luxembourg office.
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