Tax breaks on the horizon for European multinationals
In the media image: Guillaume Périgois on Unsplash
The European Commission wants to lower corporate income tax for European companies to boost research, innovation and competitiveness. In ‘de Volkskrant’, Professor of Tax Law Jan Vleggeert calls it ‘a windfall for multinationals and tax consultants.’
To make research, innovation and development more attractive from a tax perspective, the European Commission intends to relax the rules on corporate income tax. Possibilities to expand interest relief are also on the table. These measures are included in a draft proposal to reform European corporate taxation. The aim is to enable European companies to compete more effectively with their American and Chinese rivals.
‘It’s a windfall for multinationals and tax consultants,’ Jan Vleggeert says. According to him, the business sector has largely got its way thanks to a strong lobby. The professor understands the extra incentives for research and development, but is concerned that Brussels is tinkering with the rules set up to combat tax avoidance.
Those rules were introduced in the aftermath of the financial crisis in 2008. The Netherlands opted for a stricter application of those rules than requested by Brussels. If these new plans go ahead, the Dutch government might have to roll back some of those stricter measures. This could be beneficial for the investment climate, but it will also hit the government’s pockets. As companies will be paying less tax, the government will lose out on the revenue side. ‘That could cost the Dutch treasury a great deal of money,’ Vleggeert adds.
More information?
Read the full article in de Volkskrant (€, in Dutch)