The 2019 Dutch Budget (the Budget) includes a proposal to abolish the existing dividend withholding tax, replacing it with a withholding tax on dividend payments to related entities in low-tax jurisdictions and in cases of abuse as of 1 January 2020.

In a separate proposal, implementing the EU Anti-Tax Avoidance Directive (ATAD1) new rules are introduced on the deductibility of interest (earnings stripping rules) and on taxation of Controlled Foreign Companies (CFC rules). The proposal also includes minor adjustments to the exit taxation rules for companies and broadly follows a preliminary proposal that was published for consultation purposes in 2017 and further clarifications provided by the Ministry of Finance early this year. These provisions should enter into force per 1 January 2019.