As of 1 January 2008, small and medium-sized businesses will pay a lower rate of corporate income tax. Running a business will become fiscally more attractive by adjusting the first two brackets of corporate income tax as well as the rates. By extending the first bracket from € 25,000 to € 40,000, the lowest rate of 20% will apply up to a taxable amount of € 40,000. The second bracket is extended from € 60,000 to € 200,000. Moreover, the rate in this bracket will be lowered from 23.5% to 23% meaning that the latter will apply to taxable amounts ranging from € 40,000 to € 200,000.
It will become easier to start a new business out of an existing business without tax consequences. Currently this is only possible if the business closure was prompted by government intervention. From now on, this will also apply if entrepreneurs start a new business of their own accord. This measure only concerns the entrepreneur who is liable to income tax.