The Dutch Coalition Agreement - Highlights

Published: October 11, 2017

On Tuesday, October 10, the Dutch Government presented the Coalition Agreement. We are pleased that we can share the highlights of the Agreement with you, in English, prepared by Public Matters.



Coalition Agreement ‘Confidence in the Future’ 
 


The Coalition Agreement

 

  • On Tuesday, October 10, 2017, the four-party coalition (VVD/Liberal Conservatives, CDA/Christian Democrats, D66/Liberal Democrats and ChristenUnie/Christian Conservatives) have presented their coalition agreement ‘Confidence in the Future’
  • It’s been 209 days since Election Day (March 15, 2017), which makes this the longest formation period in Dutch political history.
  • Coming Thursday, October 12, Parliament will debate about the Coalition Agreement and the Cabinet plans. Prime Minister Rutte will then be appointed ‘formateur’ – to form a new Cabinet, which is expected to be installed in the week of October 23. After the installation the new Cabinet can start implementing their plans.
  • The new Cabinet will have 16 Ministers, 8 Junior Ministers and will most likely include new Ministers for Climate & Energy, a Minister for Agriculture and a Minister for Immigration & Integration.

 

Key Elements in the Agreement

 

  • The 15% dividend tax will be repealed to attract foreign business and decrease administrative red tape for Dutch business.
  • The new coalition will shake up the income tax system by cutting the number of tax bands from four to two from 2019.
  • The rate at which mortgage holders can deduct interest from tax will be reduced.
  • The amount paid in asset taxes will be cut by increasing the tax-free limit from €25,225 to €30,000. Assets include savings, shares, art and second homes.
  • The lower value-added tax rate of 6% will be increased to 9%. The lower rate applies to food, books and entertainment and will add €20 a month to the average family’s grocery and entertainment bill.
  • The basic rates of corporation tax will be cut from 25% to 21% while a tax rate of 16% will be levied over the first €200,000 in profits.
  • The dividend tax is abolished. At the same time, in order to counter mailbox construction, a tax on interest rates and royalties is introduced on outgoing financial flows to low tax jurisdictions. Equity financing is also more attractive due to the deductibility of debt.
  • In order to address tax evasion, the coalition calls for the creation of a so-called blacklist of non-cooperative tax jurisdictions and an obligation for multinationals to report blacklisting on their activities.
  • The new cabinet will take measures against 'activist shareholders' to protect Dutch corporations from hostile takeovers.
  • A Climate Bill with legally binding goals for CO2-reduction and environmental measures will be introduced. The taxes on gas will go up, and taxes on electricity will go down.
  • A national Climate and Energy agreement will be negotiated with stakeholders in order to reduce CO2-emissions.
  • An extra environmental tax might be introduced on charter flights and large freight traffic will be charged a levy based on driven kilometres.
  • €1.5 bn in extra spending on defence, €2bn extra for infrastructure, roads, public transport and bike paths.

The full text of the Coalition Agreement ‘Confidence in the Future’ is available in Dutch via this link.
 


Potential Impact on Business?

 

  • According to the new cabinet, entrepreneurs are invaluable. They are the engine of the Dutch economy. Entrepreneurs deserve space. The cabinet invests in research and innovation because they see that the Netherlands has everything in store to find the best solutions for digitization and globalization. The Netherlands can become the European leader in social, economic and digital terms. There is a good business climate for companies and researchers who really add something to Dutch economy and society. In addition to good (international) education, reliable and secure (digital) infrastructure, good care and a diverse cultural offer, the Netherlands will work on an attractive financial investment climate.
  • The new cabinet focuses on foreign companies that really add value, rather than companies that use the Netherlands as a mailbox.
  • The new cabinet continues with investment fund Invest NL to increase investments in the Netherlands. Over the next five years a total of €2.5bn is reserved for this purpose.
  • Vital sectors of industry receive special protection. Dutch companies of vital importance to Dutch society can only be taken over by other companies with explicit approval of the Dutch government. 

 

Annex: Agenda (Expected)

 

  • October 10 – Presentation of the Coalition Agreement 
  • October 12 – Plenary debate in Parliament about the Coalition Agreement
  • October 12 – Parliament appoints Prime Minister Rutte as ‘formateur’
  • October 12-22 – Formateur Rutte invites candidate Ministers and forms a new Cabinet.
  • Week October 23 – Installation of the new Cabinet Rutte III
  • Week October 30 – Plenary debate in Parliament with the new Cabinet on the Cabinet plans.

 
 
This update was prepared for you by Public Matters.