· An increased taxation base and higher basic allowance for net wealth tax;
· New procedures to block taxation related short comings in business tax;
· Changes to the motor vehicle re-registration tax.; and
· From a pro-environmental perspective, the CO2 tax for the petroleum industry to be increased.
Sweden Plans to Introduce Investment Friendly Measures
The Swedish parliament has proposed final decisions on the Budget for 2013. Major changes are listed under the following three categories:
· Relaxing provisions for Individual taxation:
1. Non-taxable benefit to employees in regards to gifts increased to SEK 15,000 from SEK 10,000.
2. Increase in the basic allowance for persons above the age of 65 years.
· Corporate taxation:
1. A 4.3% reduction in the corporate income tax rate from 26.3% to 22%.
2. Similarly, a 4.2% reduction in the tax rate on replacement reserves from 26.3% to 22%. This reduced tax rate would also be applicable on previously made reserves.
3. It has been proposed to widen the applicability of limitations on the deductibility of interest expenses on all types of loans granted by an affiliated company.
· Tax incentives for investors in small and new start-ups:
1. For income from capital, a deduction would be available equal to 50% of the acquisition cost with a maximum annual limit of SEK 650,000 for an individual.
2. A business may obtain such investments not exceeding an annual limit of SEK 20 million.
3. These provisions are planned to be applicable from September 1, 2013.
The Dutch government has passed the budget on December 27, 2012. The major provisions are summarized below:
· Provisions on “Bonus work” will be abolished in 2020; however, a future government may decide otherwise.
· Under the life span regulations, employees having built-up a claim of at least EUR 3,000 as on December 31, 2011 may contribute to the scheme till December 31, 2021. However, the built-up claim amount must be received as lump sum and would be taxed under wage tax provisions:
1. Employees can use such lump sum amount for any purpose.
2. For employees with a built-up claim of EUR 3,000 or more receiving a lump sum in 2013, the claim built up would be taxed in a specified manner.
· Extension of the anti-abuse provisions for empty companies having a reinvestment reserve:
1. A transferor company (whose shares are being transferred to the tune of 30% or in excess), must add its reserves to taxable income. Such provisions would be extended to situation where a shareholding is transferred within half a year after purchase of an asset for which the reserve is used.
2. For such cases, it is presumed there’s a connection between the purchase and the transfer of the shareholding. However, the taxpayer can prove that at the time of the purchase of the asset there existed no intention to transfer the shareholding.
· A 3.41% decrease in wages tax on education. However, in 2014, the tax would be totally abolished.
· The tax liability for director's fees is extended. Moreover, the same would also apply to certain situations where a non-resident (not being a manager of a Dutch company) carries out managerial functions for the Dutch company for a fee.
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