What to expect on Budget Day 2021?
Alongside all international tax developments affecting the Dutch tax system now and in the (near) future, we are currently heading to Budget Day 2021. On Budget Day 2021, i.e. Tuesday 21 September 2021, the government will present its budget for the calendar year 2022 as well as the envisaged tax changes and plans for the years to come (Tax Plans 2022).
At this moment, we have a caretaker government that must limit itself to changes and plans that are not controversial. Certain more controversial measures, among which the revision of taxation rules for individuals with respect to their savings and investments, already have been assigned to the new to be formed government. Also potential changes to the current innovation box regime will depend on the parties that will form part of the new government (see our blog of 15 March 2021).
Inter alia, the following proposals could be included in the Tax Plans 2022:
Other envisaged developments in 2021/early 2022
Apart from these Tax Plans 2022, in September 2021 we are also awaiting the legislative proposal addressing the elimination of double non-taxation through transfer pricing mismatches in the coming weeks. A draft of this proposal was already published for consultation on 4 March 2021 (see our Tax Flash of 5 March 2021).
In addition, reports on a possible implementation of a deduction on equity, a change to the earnings stripping rule and a report focusing on flow-through entities are expected around Budget Day 2021.
Later this year we expect, inter alia, the proposal to overhaul the current classification rules for Dutch limited partnerships (CVs or (commanditaire vennootschappen) and foreign entities comparable to CVs in order to avoid entity classification mismatches.
In the beginning of 2021 a proposal thereto (also covering funds for joint account (FGRs)) was published for consultation with the aim to publish a final proposal on Budget Day 2021 (see also our Tax Flash of 30 March 2021). However, it was already announced before the summer that this proposal is now expected to be published in the coming winter and will thus not enter into force as from 2022. In a subsequent letter of 1 July 2021, the Dutch state secretary of Finance furthermore announced that the changes to the Dutch tax classification rules for Dutch FGRs will not be part of this proposal but will be reviewed as part of the intended evaluation of the tax regimes for investments funds (FBI- and VBI-regimes) expected in the first quarter of 2022 (see also our Newsletter of 1 July 2021).
Although the Tax Plans 2022 might be relatively limited in number and impact, the ongoing tax developments will certainly impact your business. We strive to do our utmost to keep you informed on this webpage and other communication sources on all developments.
We will inform you as soon as possible about the Tax Plans 2022 and other developments. Visit our Budget Day 2021 page here.
Arco BobeldijkPartner Tax adviser
Arco C.P. Bobeldijk, tax expert, is co-chair of Loyens & Loeff’s Corporate Tax Services practice and a member of the Corporate Restructuring & Insolvency Team, the Public Enterprises Team and the contact person for Loyens & Loeff’s Tax Expert Team.T: +31 20 578 54 14 E: [email protected]