- Summary of the Dutch tax reform package for 2011
- Irish taxation in 2010 – changes favorable to holding companies
- UK taxation in 2010 – draft legislation on taxation
- Belgium: Notional Interest Deduction maintained in 2010, but capped at 3.8%
- Hungary - The most important legislative changes from 1 January 2010
Summary of the Dutch tax reform package for 2011
On 21 September 2010 the Dutch Government made public the 2011 Tax Package. The plans presented reflect the Dutch government’s policy to stimulate and to accommodate entrepreneurship.
Read the summary
Irish taxation in 2010 – changes favorable to holding companies
Budget documents provide a high-level overview of some of the measures expected for 2010. The details on these and other measures not announced in the Budget will be contained in the 2010 Finance Bill, which will be released in early 2010. We understand that the Minister intends introducing changes that would enhance Ireland's attractiveness as a holding company location.
The Minister for Finance reaffirmed that Ireland's 12.5% corporation tax rate will not change and is here to stay. Further enhancements to both the R&D and IP regimes are anticipated in the 2010 Finance Bill. The Minister also signaled important changes in the forthcoming Finance Bill to strengthen Ireland's competitive advantage in the international financial services sector. Non-resident Irish nationals or Irish domiciled individuals with worldwide income in excess of € 1m and Irish domiciled located capital in excess of € 5m will be subject to an Irish domicile levy of € 200k per annum regardless of where they are tax resident.
UK taxation in 2010 – draft legislation on taxation
The Chancellor of the Exchequer delivered his Pre Budget Report on December 9, 2009. The Treasury has announced a further change to the rules on how groups of companies are taxed when they buy back their issued debt at a discount to the amount borrowed.
The headline announcements related to personal taxation changes, including a one-off bank payroll tax of 50% on all discretionary and contractual bonuses in excess of £25,000 awarded by retail and investment banks to their employees between December 9, 2009 and April 5, 2010. Corporation tax changes were targeted at specific areas, including: changes to the new debt cap rules which come into effect on January 1, 2010; proposals to introduce a "patent box" regime for UK companies which would apply a 10% corporation tax rate to income arising from April 1, 2013 for patents registered from the date of the enactment of Finance Bill 2011 (expected July 2011); a relaxation of the rules for tax relief on research and development expenditure for small and medium sized companies; and targeted anti-avoidance measures. The government also confirmed that a discussion document on proposals to reform the controlled foreign companies (CFC) regime will be published early in 2010, and that there will be preliminary discussions on the possibility of introducing a foreign branch exemption.
Also, on the taxation of debts bought at a discount a further change was announced by the Treasury. This is in addition to the changes announced in October, and will have effect for releases of debt from November 9, 2009 onwards. The aim of the further change is to prevent companies avoiding the discount that was not taxed at the time of the buyback, being taxed on the subsequent release of the debt. Draft legislation for inclusion in Finance Bill 2010 has been published.
Belgium: Notional Interest Deduction maintained in 2010, but capped at 3.8%
Most tax changes proposed for 2010 by Belgian government indicate a tightening of tax policy. One proposal, for example, is to limit the tax deductibility of fuel costs for company cars to 75% instead of 100%. On the other hand, it is reconfirmed that the Notional Interest Deduction regime will be maintained.
On October 22, 2009, the Belgian Council of Ministers has adopted the tax plans proposal for 2010. The most important fiscal measures include that in case of an exempt merger or split up, the tax credit for research and development and the notional interest deduction would be transferred to the acquiring company. Furthermore a change in the conditions of the Belgian participation exemption is proposed. In case the 10% participation threshold is not met, the current rules state that the Belgian participation exemption can still apply if the acquisition value of the participation exceeds 1.2 mil EUR. The latter threshold would now be increased to 2.5 mil EUR. Another measure that is proposed is to limit the tax deductibility of fuel costs for company cars to 75% instead of 100%. The proposed measures would potentially be approved by the Belgian parliament by the end of 2009.
On November 14, 2009, the Council of Ministers reconfirmed that the Notional Interest Deduction regime will be maintained. In view of the budget plans, it was decided to cap the maximum interest percentage for the notional interest deduction to 3.8% for assessment years 2011 (financial year as from December 31, 2010) and assessment year 2012 (financial year as from December 31, 2011).
Hungary - The most important legislative changes from 1 January 2010
Among the most important changes are the increase in the corporate tax rate and the newly introduced partial exemption from CIT of interest received from abroad.
Read the changes
