As you might know on November 22, 2023 elections for the House of Representatives were held in The Netherlands. In the night from May 15 to May 16 2024 the political parties PVV, VVD, NSC and BBB came to a coalition agreement, titled: “Hope, guts and pride”, and agreed to form a so-called extra-parliamentary cabinet.

Unusual for the Netherlands the coalition agreement only contains the policies the new Dutch coalition intends to implement in a high-level manner instead of going into detail as we have been used to see in coalition agreements that former Dutch coalitions have drafted. The policies that new coalition intends to introduce might also directly or indirectly impact companies that do business in the Netherlands. A few of these intended policies we will mention below. Our list does not include an overview all the intended policies and does not solely include policies in the area off taxes.

Immigration of foreign (skilled) workers and foreign students

• Migrant workers from outside the EU, with the exception of so-called skilled workers, will become subject to work permit requirements;
• It will be considered whether and, if so, which tax benefits under the extraterritorial cost arrangement will be scaled back;
• The qualification requirements for the skilled workers scheme (30% Allowance) will be tightened and increased;
• Restricting study migration in higher education at the undergraduate stage, except for studies where there are labor market shortages, taking into account local conditions; and
• Study migration will become more selective by more courses being given in the Dutch language, a numerus fixus for foreign students, restriction to obtaining a basic scholarship and an increase in tuition fees for non-EU students.

Proposed measure to strengthen the investment climate

• Improving the business climate will paramount. This includes tax measures. Recent tax increases for entrepreneurs, increases in energy taxes and wealth that have been announced since Budget Day will be partially reversed;
• Companies will be helped with the energy transition and with solving electricity grid congestion;
• The availability of talent, strengthening the knowledge economy, innovation, and the (digital) infrastructure will be prioritized; and
• Energy costs (both for businesses and consumers) should not be significantly out of line with those in our neighboring countries. It will be considered what measures are needed to support businesses and consumers.

Proposed tax measures

• The general interest deduction limitation as it applies for Dutch Corporate Income Tax purposes (the earnings stripping rule) is to be raised from 20% to 25% of the EBITDA;
• The measure to abolish the share repurchase facility for Dutch dividend withholding tax purposes with effect from 2025 will be reversed;
• As of 2026 the reduced VAT rate on lodging will be largely abolished. The VAT rate for lodging will be increased from 9% to 21%. The current low VAT rate for camping sites will be retained and is exempt from the increase;
• As of 2026 the reduced VAT rate that currently applies to cultural goods and services (museums, books, newspapers, etc.) will be largely abolished. The VAT rate will be increased from 9% to 21%. The reduced VAT rate for daytime recreation and cinemas will be retained and will not be increased;
• As of 2028, a circular plastic levy will be introduced;
• As of 2025 the measure to increase the rate of Box 2 of the Dutch Individual Income Tax (Aanmerkelijk belang (substantial interest held by a shareholder)) from 31% to 33% will be reversed;
• The rate of the first 2 brackets of the Energy Tax on natural gas (up to 170,000 m3 a year) will be reduced by 2.8 cents per m3 in 2025, rising to 4.8 cents per m3 in 2030 (in 2024 price level);
• The announced increase of the 3rd, 4th and 5th brackets of the Energy Tax on natural gas by 22.4% as per 2025 and an additional 2.7% by 2030 as announced will be reversed; and
• The rate of the gambling tax is to be increased from 30,5% to 37,8%.

Obviously all the above are still only plans and the final policies will still have to be worked out in detail by the new Dutch Government.

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