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Dutch government gives businesses greater scope to invest in the host country

2013-09-13

Until the end of this year, businesses will be able to immediately write off up to half of the cost of new capital assets for tax purposes. This will enable them to reduce their tax bill over the next couple of years. It will provide extra scope for investment amounting to some €400 million.. Thanks to this arbitrary depreciation scheme, businesses can defer their tax remittance in 2013 by a number of years. This will give them extra cash and an added incentive to invest now. The scheme is open both to businesses that pay corporation tax and to those that pay income tax. On a one-off basis, up to 50% of spending on capital assets in the second half of the year can be depreciated arbitrarily. Normally a lower percentage applies.

 

Overseas taxes for companies include corporate income tax and withholding income tax. In a Dutch holding company structure, taxes are exempted for dividend and capital gain in other countries; dividend paid by EU subsidiaries to Dutch holding companies is exempted from withholding income tax; for Non-EU subsidiaries, the tax will be exempted or reduced pursuant to relative tax agreements; (through cooperative organization structure) profits back to China will be immune from withholding income tax and functional currencies (such as RMB) can be chosen in the submission of tax declaration to avoid the influence of exchange rate fluctuation. Through a Dutch holding company, withholding income tax generated in financing can be avoided by tax planning.

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