Dutch Budget For Brexit, Scrap Tax For Multinationals

The Dutch government said Tuesday it is setting aside tens of millions of euros to deal with the fallout when Britain leaves the EU next year and courted controversy by announcing it will scrap dividend tax to lure foreign investment.

The Hague, (APP - UrduPoint / Pakistan Point News - 18th Sep, 2018 ) :The Dutch government said Tuesday it is setting aside tens of millions of Euros to deal with the fallout when Britain leaves the EU next year and courted controversy by announcing it will scrap dividend tax to lure foreign investment.

"In order to prepare The Netherlands as best as possible for Brexit, some 90 million euros are being set aside," the finance ministry said in a statement as is it unveiled its 2019 budget at the opening of parliament.

"This... means giving customs and the Dutch food and goods agency extra capacity... while also covering additional costs incurred in care and social security," the statement said.

Britain is leaving the EU on March 29 next year.

The Dutch economy, which has seen close ties to Britain through top companies such as Shell and Unilever, stands to sustain substantial damage in the event of a "hard Brexit", Dutch economists have warned.

But at the same time, the Netherlands is also trying to lure more foreign investment on the back of Brexit by plans to end the tax companies pay on profits distributed to shareholders as dividends.

Prime Minister Mark Rutte has defended the plan, arguing that scrapping the dividend tax could play a major role in keeping foreign companies in The Netherlands while attracting others from the outside.

The government on Tuesday however admitted the plan to scrap the dividend tax "is more expensive than originally thought," with the NOS public broadcaster reporting some 600 million euros ($700 million) were added the original figure, taking the total cost of the measure to around 2 billion euros.

Opposition parties lashed out at Rutte and the government for the move, which they said pandered to the wishes of large multinationals.

Meanwhile, many expats living in The Netherlands reacted with dismay to the government's plans to eliminate a 30 percent tax break on January 1 next year.

Despite intense lobbying for a transition period before the tax break is done away with, the Dutch government gave no indication Tuesday it was planning to do so.

Lobby group Expats United in the Netherlands said it now planned to seek legal advice on the matter.

The decision to unilaterally scrap the 30 percent tax rule is "ill-planned, harsh, and unfair" and will "dramatically affect the lives of thousands of expats and their families living and working in the Netherlands," the group told the expat news website Dutchnews.nl