Dutch Coalition Parties Agree to Scrap Tax on Share Buybacks
(Bloomberg) -- The four parties in talks to form the next Dutch government plan to cancel a 15% tax on share buybacks, according to people familiar with the matter.
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Election winner Geert Wilders and the three right-wing parties with whom he’s negotiating a government program have agreed to scrap the tax, said the people, who shared information about the ongoing coalition talks on condition of anonymity. The parties also want to reverse a previous decision to shrink tax breaks for expatriates, they said.
The Netherlands last year introduced a 15% tax on share buybacks, which is scheduled to come into effect next year. The law triggered a selloff in shares of Netherlands-based banks and other companies when it was approved by the Dutch parliament. Lawmakers had said the tax would raise €1.2 billion ($1.3 billion).
Dutch lenders ING Groep NV and ABN Amro Bank NV’s shares rose Monday after Bloomberg reported the negotiating parties’ plans.
May 15 marks the deadline for presenting details of the coalition talks to parliament. Even if those discussions fall through, the Dutch parliament may still hold a vote by July 5 on whether to cancel the share buyback laws, the people familiar with the matter said.
Far-right politician Wilders’ party delivered a shock victory in November’s general elections. Although he remains in negotiations with other right-leaning Dutch parties for a coalition that is likely to form the country’s next government, he recently renounced his bid to become prime minister in order to remove a stumbling block to those talks.
Some of the Netherlands’ biggest companies including ASML Holding NV have previously criticized the decisions to introduce the buyback tax and eliminate the expat benefit, saying those moves would affect their investment decisions.
In April, State Secretary for Tax Affairs Marnix Van Rij suggested tweaks to the country’s corporation tax, saying the buyback levy puts the Netherlands at a disadvantage to countries that don’t have similar measures.
Spokespeople for the four parties declined to comment on the substance of the confidential talks.
Read More: Wilders May Tap Next Dutch Prime Minister as Soon as Next Week
(Updates with details and market reaction throughout.)
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