Legislative proposal for Collective Tax Act 2015

The State Secretary for Finance has submitted the legislative proposal for the Collective Tax Act 2015 to the Lower House of the Dutch Parliament. It has been customary for several years to have an interim legislative proposal submitted to Parliament separately from the annual Tax Plan, so as to ensure that the (parliamentary) discussion of tax-related legislative proposals should be spread more evenly throughout the year. This year’s legislative proposal contains a number of substantive measures supplemented by adjustments of a technical and editorial nature.

Interest discount on staff loans

The nil valuation of the interest discount on staff loans forming part of the wage tax regime harbours the risk of bringing about an inappropriate rate advantage within the owner-occupied tax scheme owing to the downscaling at a rate of 0.5% p.a. – with effect from the first of January 2014 – of the tax relief rate for interest paid on owner-occupied home loans from 52% to 38%. The rate advantage is confined to employees whose income is taxed in the fourth wage and income tax rate band. The nil valuation in connection with the interest benefit owing to the staff loan is abolished in order to undo the rate advantage. The owner-occupied home loan interest benefit cannot be designated as a final levy component.

Funeral insurance featuring blocked savings account

The Box 3 exemption for funeral insurance featuring a blocked savings account which has applied since the first of January 2010 is to be abolished. This particular product is not on offer with any of the banks because of the marginality of the savings in combination with the steep costs of introducing and maintaining the requisite accounting systems. The Box 3 exemption for funeral insurance contracts as such is to stay.

Holding company loss regime

The holding company loss regime restricts the set-off of losses in the corporation tax sphere to earnings generated in years during which the company in question had the status of holding company or finance house. The Supreme Court of the Netherlands in September 2014 issued a total of four rulings on the theme of the holding company loss regime, the upshot of which rulings has been that losses incurred during the years in which the holding company operations were first launched and discontinued, respectively more often than not will not qualify as holding company losses, so that no set-off restriction will apply. In order for the State not to suffer a structural loss in tax revenue, it has been decided to amend the regime with effect from the first of January 2016.

Dividend tax

The dividend tax rebate procedure for legal entities not having corporation tax liability is being expanded to include legal entities governed by public law and public-sector bodies governed by private law having tax liability by virtue of the Corporation Tax Liability for Public Law Enterprises (Modernisation) Act of the Netherlands whose shareholding is attributable to the part of the relevant enterprise which has objectively been exempted.

Private motor vehicle and motorcycle tax rebate regime for exported vehicles

According to the proposed legislation, private motor vehicle and motorcycle tax rebate will only be granted in future for motorised vehicles that have lastingly been registered in another EU or EEA Member State.

Motor vehicle tax nil rate

Passenger cars boasting a CO2 emission rate of 0 g/km with effect from the first of January 2016 will come under the motor vehicle tax nil rate. It is erroneously stated in the 2015 Tax Plan that only passenger vehicles – as opposed to delivery vans and motorcycles, et cetera – will qualify for said nil rate.

Tap water tax

The proposed legislation entitled “Sundry fiscal measures 2014” comprised a simplification of the tap water tax by no longer factoring separate water supplies into the equation where the tax charge was concerned. The amendment in question was subsequently abolished in view of the elimination of the tax cap of 300 m3 per connection. Given that the 2015 Tax Plan provides for the reintroduction of the tax cap, it has been suggested that the previously proposed simplification should be retroactively restored with effect from the first of January 2015.

Energy tax

A supplementary proviso is to be added to the terms and conditions governing the application of the reduced natural gas tariff for glasshouse horticultural businesses, in that the reduced tariff will not apply to businesses having run into difficulties owing to the EU state aid regulations.