The tax of 25% on paid dividends is to be reduced to 15% (from 1 January 2007). This is stated in the 'work to profit' bill from State Secretary Wijn that has been approved by the Council of Ministers.
Furthermore, income tax for independent entrepreneurs and corporation tax will be strongly reduced. A lower dividend tax and fall in the tariffs of profit taxes will improve the business climate.
It is expected that the ‘work to profit’ bill will be presented to the House of Commons in the summer of 2006. The total costs for the Treasury amount to 730 million euro. State Secretary Wijn has moderated the original plans for financing the tax reductions. Thus the tax depreciation on company property will be less limiting than initially presented in the ‘work to profit’ bill.