The reduction in the high Vpb rate proposed in the Wet bedrijfsleven 2019 will not be implemented. It is now proposed to reduce the high Vpb rate by 1.2 percentage points less in the structural situation compared to the Business Act 2019. As a result, the high Vpb rate will remain 25% in 2020 and will be reduced to 21.7% on 1 January 2021. The planned reduction in the low rate of corporation tax will not be adjusted. That rate will be 15% as of 1 January 2021.
Tax interest on corporate income tax
The corporate income tax return is filed in time if it is filed before the first day of the sixth month following the end of the period covered by the return. If the financial year is equal to the calendar year, it is therefore 1 June. In such a case, however, tax interest can be calculated, i.e. if the return is submitted after the first day of the fourth month following the end of the financial year (1 April). It has now been proposed not to charge tax interest if the tax return has been submitted on time. Thus, before the first day of the sixth month following the end of the period and if the assessment is imposed in accordance with the tax return submitted. The measure already applies to tax assessments for periods commencing on or after 1 January 2019.
End of payment discount Vpb
If taxpayers pay the tax due in a single instalment and not in monthly instalments, they receive a payment discount from the tax authorities in certain cases. The Cabinet wants to abolish this payment discount for corporation tax as of 1 January 2021.
Innovation box slightly less advantageous
If companies (e.g. PLCs, etc.) make a profit from innovative activities, they have to pay less corporation tax on this part of the profit. The so-called innovation box applies to these innovative profits. The government plans to increase the effective rate of the innovation box from 7% to 9%. This plan has not yet been presented in the form of a bill. It is intended to apply from 2021.
Reduction of the self-employed tax deduction
In order to reduce the difference between the self-employed and employees, the Cabinet proposes to reduce the self-employment deduction by steps from € 7,280 in 2019 to € 5,000 in 2028.