Every third Tuesday in September the Dutch government presents their budget for the coming year. It was a great opportunity for the new center-right coalition to demonstrate how truly conservative (confusingly called liberal in Dutch) they really are. And while their proposals are far from revolutionary, it does seem like a serious attempt to reduce the burdens of regulation. The following changes are noteworthy:

  • Simplification of tax free brackets for sole proprietorship. The present system discourages profit-making by lowering the tax-free bracket for sole proprietors as their profits increase. Instead, the cabinet proposes to replace this regressive system with a fixed threshold of €7.280 for all sole proprietors, regardless their profitability. However, one can also interpret the measure as a tax increase for the smallest of entrepreneurs.
  • The mandatory contribution to the Dutch chamber of commerce will be abolished by 2013
  • Abolition of several 'silly taxes': pollution tax, groundwater tax, tax on chewing tobacco, tax on non-alcoholic beverages, tap water tax, packaging tax and the Euro-vignette (toll) for heavy trucks.
  • Reducing the accessibility of the 30% ruling for foreign employees and re-migrating expats.

The Dutch political system tends to lead every issue towards a compromise; predictably the 2012 budget has every productive proposal offset by a counterproductive one. It is a lost opportunity for the Netherlands´ first conservative prime minister in 92 years (Mark Rutte) to really reduce the obese government and her craving for more taxation.

Yet on the positive side the center-right coalitions' efforts to reduce burdensome regulations do yield results. In an article the Association for Small Businesses (MKB Nederland) heralds the new cabinets' effort of reducing the costs associated with regulation. "Unlike the previous cabinet, the present one does seem to succeed in abolishing persistent nuisances caused by excessive regulation".

In other words, while doing business in the Netherlands does not get cheaper, it will become more relaxing.

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