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Corporate Income Tax in the Netherland’s 2021 Tax Plan

Earlier this month, the Ministry of Finance of the Netherlands presented its 2021 Budget. As a part of the budget presented, a tax plan for the next year was also laid out. Among other things, the tax plan looked into the corporate income tax for the coming year.

Corporate income tax (CIT) is payable by private or public limited companies (BVs and NVs) and, in certain circumstances, by foundations and associations on their worldwide income (exceptions apply). Standard CIT rate currently stands at 25%.

Earlier this year it was proposed to reduce the CIT rate to 21.7%, however, the in the presented budget and the tax plan this proposal did not go forward, meaning that the applicable standard rate will remain at 25% in 2021.

Yet, for profits which are subject to the tax but are under Euro 245 000, the CIT rate will be reduced to 15%. This change constitutes both a reduction of the special CIT rate (currently standing at 16.5%), and an increase of the amount to which the special rate applies (currently Euro 200 000). Furthermore, it is proposed that this reduced CIT rate will start to apply to profits as high as Euro 395 000 in 2022.

For the companies operating under the “innovation box regime”, the effective tax rate on royalty income in 2021 will be increased from 7% to 9% (in line with the budget proposal of last year).

Need further assistance with CIT or its filing? STRIK TAX|LEGAL is a boutique, multilingual consulting firm that advises on matters of Dutch corporate and tax law and is happy to assist its clients in navigating legal and tax landscape in the Netherlands.

Although STRIK TAX|LEGAL has put its utmost effort in producing this newsletter, STRIK TAX|LEGAL makes no representation as to the (accuracy and completeness of the) contents of this newsletter and excludes every responsibility of liability for any type of damage deriving from the use of its contents.