KPMG Meijburg & Co, the Netherlands comments on 1996 Budget.
This is contribution number 19 by KPMG Meijburg & Co regarding 1996 Dutch Budget.
In the 1996 Budget of the Dutch central government (released 19 September 1995) several tax relief proposals were briefly discussed. At present the legislative proposals to implement such tax incentives is pending before Parliament. The proposals include, but are not limited to:
- An increase of the investment deduction; it is proposed to increase the special deduction for qualifying investments by approximately one third whereas the maximum amount of investments for which the deduction will be available remains Dfl. 515,000 per year. As a result the investment deduction percentages will vary between 3 and 24% depending on the amount of qualifying investments made.
- A special investment deduction for the shipping industry; the current exclusion of ships from the investment deduction scheme will cease to apply. However, the exclusion will continue for vessels which are used for representative purposes.
- Free depreciation; a possibility of free and unlimited depreciation will become available to individuals who decide to start their own business. The free depreciation rule will be applicable to, for instance, business assets acquired or produced in the starting-up period. The maximum amount of investments to which the free depreciation facility will apply, will also be Dfl. 515,000.
- An increase of the special deduction only available to starting entrepreneurs; this deduction will be increased from Dfl. 2,476 to Dfl. 3,500.
- The introduction of a helpdesk for starting entrepreneurs.
- An increase of the budget for accelerated depreciation on environmentally-friendly investments.
- Export risk reserve: The possibility to form an export risk-reserve will be increased. The formation of such a reserve no longer requires that these risks can (effectively) be insured. The allocation to the reserve is set at 5% of the turnover realized on the export to specified countries. This reserve will be limited to a maximum amount of Dfl. 500,000.
- Since January 1, 1994, research & development activities are encouraged, by providing a reduction of wage tax payable on salaries paid for such activities; i.e. up to Dfl 100,000 of salary the effective burden of wage tax payable is reduced by 25%, and reduced by 12.5% for salary payments in excess of Dfl. 100,000. Currently it is proposed that the highest relief percentage of 25% is increased to 40% and the amount to which this percentage can be applied will be increased to Dfl. 150,000. A similar increase of the facility will be made available to self-employed independent researchers.
- Real estate transfer tax; there will be an exemption from real estate transfer tax if farms are relocated for ecological reasons.
This message is most likely to be relevant for all those having business interest in or with the Netherlands.
Further information can be obtained from mr Alfred GM Groenen, MCL, KPMG Meijburg & Co, Amsterdam (Netherlands); fax 31 (20) 656 1247
Keywords: Netherlands / Dutch / Europe / EC / EU / European Union / KPMG Meijburg & Co / inward investments / MNE / depreciation allowance / writing down allowance / WDA / accelerated depreciation / starting a business / special reserves / research & development / R&D / Real Estate
Note: The content of this contribution is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
