Collective Tax Act 2015: The State Secretary elaborates

The Dutch State Secretary for Finance, Eric Wiebes, in a memorandum recently answered questions raised by the Permanent Finance Committee on the topic of the Collective Tax Act 2015. We have summarised the highlights for your convenience.

• Interest discount on staff loans: the calculation of the minimum amount for repayment (as per Section 3.119c of the Netherlands Income Tax Act 2001) is to be based on the higher interest rate (exclusive of the staff discount, it should be noted). According to Mr Wiebes, Section 3.84(1) of the Income Tax Act 2001 does not permit an element of pay having been designated as a final levy component resulting in particular costs having to be borne by the employee where the tax is either being accounted for as part of the free margin or is employer-borne.
• Profiteering policy commutation: Mr Wiebes intends to grant exemption from the minimum valuation rule in connection with profiteering policy commutation. The relevant amendment is to be included in the “Other Tax Measures for 2016” draft legislation.
• Dividend tax: planned introduction of withholding exemption for (legal) entities based within the EU/EEA or other countries that have no liability for corporation tax (or profits tax otherwise). The refund procedure as per Section 10 of the Netherlands Dividend Tax Act currently takes care of this.

Please do not hesitate to contact your Tax Consultant if any of the above has left you wondering!