The Dutch government launches its plans for the coming year.
Below we outlined the main corporate tax proposals for 2022.
Corporate income tax rate:
The lower bracket of the corporate income tax rate will increase to EUR 395,000 in 2022 (instead of EUR 245,000 in 2021). As a result, profits up to EUR 395,000 will be taxed at 15% and any excess profits will be taxed at 25%.
As of 1 January 2022, tax losses can be carried forward indefinitely . Currently, tax losses can be carried forward six years. On the other hand, tax losses may be offset in full against profits up to EUR 1 million, whereas the set off will be limited to 50% for profits in excess of the EUR 1 million threshold.
Downward transfer pricing adjustment by mismatches:
It is proposed to not grant the downward transfer pricing adjustment if the corresponding amount is not taxed or fully taxed at the level of the related foreign entity. This is to avoid mismatches in taxation that arise due to the application of the at arm’s length principle, in the case of informal capital structures and in the case of deemed profit distributions.
Tax liability rules for reverse hybrid entities:
As a result of the European Anti Tax Avoidance Directive 2 (ATAD2), the tax liability measure will take the form of a subjective tax liability for Dutch partnerships and entities incorporated under foreign law that qualify as a reverse hybrid entity.