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    The Netherlands’ Green Budget?


    In a bid to take substantial strides towards its climate goals, the Dutch government unveiled a series of legislative proposals and amendments concerning energy and environmental taxes on Budget Day.

    These measures are geared towards reducing the Netherlands’ greenhouse gas emissions by a commendable 55% by 2030, in alignment with the government’s climate ambitions.

    However, it’s essential to bear in mind that these proposals are subject to discussions, amendments, and adoption by the Dutch parliament.

    This article provides an in-depth look at some of those proposals covering:

    Corporate Income Tax


    From 1 January 2024, the energy investment deduction (EIA) rate will undergo a reduction, declining from 45.5% to 40%.

    Additionally, the sunset clause for energy and environmental deductions has been extended until 2028, implying that they will remain in effect, at least until that time.


    Energy Tax


    Energy tax exemption for metallurgical and mineralogical activities

    As of 1 January 2025, the energy tax exemption for electricity and gas used in metallurgical and mineralogical processes will be eliminated.

    The Dutch government views these exemptions as fossil subsidies, which no longer align with the nation’s climate objectives.

    New Specific Input Exemption for Hydrogen Production

    In addition, a new energy tax exemption will be introduced on 1 January 2025, for the supply of electricity used in hydrogen production via electrolysis.

    This exemption is confined to electricity utilized directly in the water-to-hydrogen conversion process, encompassing activities like demineralization, electrolysis, and the purification and compression of resulting hydrogen.

    Exemptions Related to Electricity Production

    Starting January 1, 2025, several changes are proposed regarding exemptions for electricity production, including cogeneration.

    Key changes include:

    Phase-Out of Special Energy Tax Rate for Greenhouse Horticulture Sector

    The reduced energy tax rate presently applicable to the greenhouse horticulture sector will be gradually phased out, commencing on 1 January 2025, and concluding in 2030.

    Changes to Energy Tax Brackets

    Effective from 1 January 2024, a new, lower bracket in the energy tax will be introduced for both electricity and gas.

    This bracket will cover the first 2,900 kWh of electricity and 1,000 m3 of gas.

    This adjustment is intended to provide the government with the flexibility to reduce energy tax for households when necessary, aligning with the current price cap for households.

    Amendments to Rules for Block Heating

    Various changes will be made to tax regulations for block heating, designed to accommodate the modifications in tax brackets mentioned above.

    Carbon Tax

    Increased Minimum Carbon Tax Price for Industrial and Electricity Generation Sector

    Starting January 1, 2024, the Dutch minimum carbon tax prices for the industrial and electricity generation sectors will rise. Despite these increases, the government anticipates no budgetary implications, given the existing EU ETS price. The new minimum prices are as follows:

    Introduction of a Carbon Tax for the Greenhouse Horticulture Sector

    Commencing January 1, 2025, a carbon tax will be introduced for CO2 emissions in the greenhouse horticulture sector, mirroring the current system in place for the industrial sector.

    This development coincides with the introduction of specific EU ETS obligations for the built environment.

    Coal Tax

    With effect from 1 January 2028, the coal tax exemptions for dual coal use and coal utilization for energy production will be discontinued.

    The current coal tax rate stands at EUR 16.47 per metric ton.

    Other proposals

    New information obligations will be incorporated into specific energy tax regulations to align with the European Commission’s guidelines on State Aid for climate, environmental protection, and energy.

    Commencing on 1 January 2024, these rules will encompass principles for providing data and information, upon request, to comply with EU obligations.


    The Dutch government’s commitment to climate goals is evident in these proposed tax changes, which seek to incentivize eco-friendly practices while gradually phasing out less sustainable measures.

    These proposals will be closely monitored as they make their way through the legislative process, potentially reshaping the landscape of energy and environmental taxation in the Netherlands.

    If you have any queries about the Netherlands’ Green Budget, or Dutch tax in general, then please get in touch.

    Canada’s new Equity Repurchase Tax: What You Need to Know

    Canada’s new Equity Repurchase Tax – Introduction

    Last month, the Canadian federal government introduced a draft legislation package known as the August Proposals.

    These proposals encompass a range of revisions to amend the Income Tax Act, with a key focus on the introduction of a novel equity repurchase tax.

    Set to take effect on 1 January 2024, this tax is poised to impact numerous publicly traded entities, subjecting them to a 2% levy on the “net value” of specific equity repurchases.

    Canada’s new Equity Repurchase Tax – key points


    The equity repurchase tax applies to a broad array of publicly traded entities. This includes Canadian-resident corporations (excluding mutual fund corporations), as well as certain trusts and partnerships, collectively referred to as Covered Entities.

    Key points to understand about the equity repurchase tax:

    The genesis of the new tax


    The origins of this equity repurchase tax can be traced back to the 2022 Fall Economic Statement. It was here that the Canadian government initially revealed its intention to introduce a 2% corporate-level tax on the net value of share buybacks by Canadian public corporations.

    This tax bears similarity to the 1% share buyback tax enacted in the United States under the Inflation Reduction Act of 2022.

    Budget 2023 provided more comprehensive legislative proposals, extending the tax’s scope to encompass specific publicly traded trusts and partnerships, thus expanding its reach.

    It also clarified that normal course issuer bids and substantial issuer bids would be considered equity repurchases for tax purposes.

    Understanding the Tax Calculation


    The equity repurchase tax relies on a netting rule formula: 0.02 x (A – B), where:

    This netting rule applies annually, corresponding to the Covered Entity’s fiscal year, for repurchases and issuances occurring after 1 January 2024.

    Importantly, there are no grandfathering rules, meaning that equity outstanding prior to this date, but repurchased afterward, remains subject to the tax.

    Moreover, any excess in Variable B over Variable A cannot offset repurchases included in Variable A in subsequent years.

    Equity Definition for Tax Calculation


    To determine the equity repurchase tax, the calculation considers repurchases and issuances of equity by a Covered Entity.

    However, not all equity is included; the tax excludes equity that exhibits “substantive debt” characteristics. Substantive debt equity is defined as:

    Many preferred shares may not meet the criteria for substantive debt, such as convertible preferred shares and voting preferred shares.

    Since there are no grandfathering rules, Covered Entities with issued and outstanding preferred shares must evaluate whether their shares qualify as substantive debt for tax purposes.

    Variable A


    Variable A includes the fair market value of equity (excluding substantive debt) repurchased by the Covered Entity in a taxation year.

    Certain equity acquisitions by specified affiliates of a Covered Entity are also included.

    However, the deeming rule does not apply to specified affiliates that are registered securities dealers acting as agents for customers or certain employee benefit trusts.

    Exceptions to Variable A include specific reorganization transactions, such as share-for-share exchanges and tax-deferred amalgamations, winding-up of the Covered Entity, and other tax-deferred transactions.

    Variable B


    Variable B includes the fair market value of equity (excluding substantive debt) issued by a Covered Entity. Equity issuances are included only if:

    Anti-Avoidance Rule


    An anti-avoidance rule applies to prevent transactions aimed at decreasing the total value of equity repurchased or increasing the total value of equity issued, primarily for tax avoidance purposes.

    De Minimis Threshold


    The August Proposals introduce a de minimis threshold of $1 million. The tax is not applicable if Variable A is less than $1 million in a taxation year. This threshold is calculated on a gross basis without considering the netting rule and the value of equity issuances in Variable B.

    Filing and Payment Obligations


    Covered Entities repurchasing equity in a taxation year must file a return and, if applicable, pay the equity repurchase tax.

    Filing and payment deadlines vary for corporations, trusts, and partnerships, with specific timelines outlined for each entity.


    In summary, the introduction of Canada’s new equity repurchase tax marks a significant development in the country’s tax landscape.

    Understanding its intricacies and ensuring compliance is crucial for publicly traded entities, as non-compliance can result in financial penalties.

    If you have any queries about this article on Canada’s new Equity Repurchase Tax, or Canadian tax matters in general, then please get in touch.

    The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article.

    Lifetime Allowance changes – an overview

    Lifetime allowance changes – Introduction

    In July the Government published draft legislation dealing with the abolition of the lifetime allowance (LTA) with effect from 6 April 2024.

    The draft legislation provides for the introduction of two new lump sum allowances which will apply to an individual and are used when a relevant lump sum is paid in respect of an individual and at least part of that lump sum is tax free.

    The new allowances are the lump sum and death benefit allowance of £1,073,100 (the same as the LTA immediately before its abolition) and the lump sum allowance of £268,275 (25% of the LTA immediately before its abolition).

    More detail on the new lump sum allowances

    The individual’s lump sum allowance is used when the individual takes tax free cash in the form of:

    The individual’s lump sum and death benefit allowance is used when the individual takes tax free cash in the form of an authorised lump sum and also when a person receives tax free cash in the form of an authorised lump sum death benefit in respect of the individual.

    Where part of a lump sum is taxable and part isn’t, only the tax free element counts towards the relevant lump sum allowance.

    Pension benefits will be taxed through the existing income tax structure for pension income. To the extent that a lump sum is taxable, it will normally be taxed at the recipient’s marginal rate of income tax.

    A “pension commencement lump sum” equating to 25% of the value of the benefits being taken can generally be taken tax free provided the individual has sufficient headroom available under both types of lump sum allowance. 25% of an UFPLS will also be tax free provided the individual has sufficient lump sum allowance headroom.

    Any amount in excess of the limits will be taxed as pension income.

    Lump sum death benefits paid within 2 years in respect of a deceased member aged under 75 will generally still be tax free provided there is sufficient headroom under the deceased individual’s lump sum and death benefit allowance. Any excess will generally be taxed as income in the hands of the recipient.

    LTA protections

    The draft legislation contains extensive provisions dealing with individuals who currently benefit from the various statutory protections in relation to the LTA.

    “Primary protection” will cease to exist, but will be replaced with a new set of protections.

    For individuals with enhanced protection, their “applicable amount” for a pension commencement lump sum is the amount that could have been paid on 6 April 2023.

    The deadline for applying for fixed/individual protection 2016 will be 5 April 2025.

    Transitional measures

    The Government plans to publish transitional provisions to deal with the situation where one or more lump sums have been paid in respect of an individual before 6 April 2024, but at least one further lump sum is paid on or after that date.

    No intention to significantly expand pension freedoms

    When the draft legislation was first published, the Association of Consulting Actuaries suggested that it would have the effect of extending to defined benefits the “pension freedoms” that have applied to money purchase benefits since 6 April 2015.

    In its Pension schemes newsletter 152 HMRC has confirmed that it is not the Government’s intention to significantly expand pension freedoms.


    As we prepare for the abolition of the lifetime allowance (LTA) and the introduction of new lump sum allowances in April 2024, the UK pension landscape is undergoing a transformative shift.

    These changes, unveiled in the government’s draft legislation, bring both challenges and opportunities for individuals and pension scheme providers.

    Understanding the intricacies of the individual lump sum allowance, the lump sum and death benefit allowance, and the taxation implications for various scenarios is paramount.

    The introduction of transitional measures and the preservation of certain protections, albeit with modifications, underscore the government’s commitment to managing this transition smoothly.

    Importantly, HMRC’s assurance that there will be no significant expansion of pension freedoms in relation to defined benefits provides clarity in an ever-evolving landscape.


    If you have any queries about the lifetime allowance changes, or any other UK tax matters, then please do get in touch.

    National Party unveils ‘back pocket boost’

    Back pocket boost – Introduction

    In a bold move aiming to alleviate the financial pressure on the middle class, the National Party has unveiled their ‘Back Pocket Boost’ Election Tax Plan.

    With a focus on tax relief and strategic revenue measures, this $14.6 billion tax cut policy is set to bring substantial changes to New Zealand’s economic landscape.

    Tax reform and relief

    At the heart of the ‘Back Pocket Boost’ plan lies a dual approach: approximately $8.4 billion in cuts and $6.2 billion in revenue increases.

    The key ambition is to reduce Government expenditure while also streamlining contractor and consultant spending.

    Rental properties and property transactions

    A pivotal change proposed by the National Party revolves around rental properties.

    The plan seeks to fully restore interest deductibility for these properties, with a comprehensive implementation expected by April 2026.

    Additionally, the Brightline test, which assesses capital gains tax on rental properties, will undergo a significant transformation. The existing ten-year rule will be shortened to just two years by July 2024.

    This alteration implies that properties acquired before July 2022 will be exempt from the Brightline test upon sale.

    However, the plan also entails the removal of the depreciation tax break for commercial buildings, previously introduced in response to the post-Covid landscape.

    Foreign buyer tax and climate dividend

    National’s plan includes an assertive approach towards foreign property buyers.

    A 15% foreign buyer tax will be introduced for home purchases valued at $2 million or more, excluding individuals without a resident class visa.

    To respect the existing agreements with Australia and Singapore, citizens from these nations will be exempted from this new tax rule.

    The introduction of a Climate Dividend is another standout feature. Revenue generated from the Emissions Trading Scheme will be earmarked to provide tax relief to individuals, pivoting away from subsidizing large corporations.

    Similarly, revenue from the Climate Emergency Response Fund will be directed toward this endeavor.

    Regulatory landscape and tax bracket adjustments

    National is also committed to a proactive regulatory environment. They intend to establish a regulatory framework for online casino gambling to ensure offshore operators comply with tax regulations.

    Tax bracket adjustments form a crucial facet of the plan. Changes to threshold amounts for marginal tax rates will facilitate tax relief for the middle class.

    While there will be alterations to the middle-class threshold rates, National has confirmed that the 39% top tax rate on income exceeding $180,000 will remain unchanged in their first term.

    Tax credit expansion

    The National Party envisions enhancing after-tax income through a series of tax credit expansions:

    Repealing Tax Mechanisms

    The plan includes the repeal of several tax mechanisms, including the controversial “App Tax,” the Auckland Regional Fuel Tax, and the Ute Tax, indicating a commitment to simplify and refine the existing tax structure.

    Visa Processing Reforms

    In a bid to align with global practices, National intends to implement a ‘user pays’ visa processing model, effective from 1 July 2024.

    While this will result in increased visa processing fees for most applicants, Pacific Island origin applications will remain exempt. A priority processing fee will also be introduced to expedite applications.


    The National Party’s ‘Back Pocket Boost’ Election Tax Plan is poised to reshape the tax landscape of New Zealand.

    By addressing the needs of the middle class through tax relief, credit expansions, and strategic revenue measures, the plan endeavors to foster economic growth while easing the financial burden on individuals and families.

    As the election approaches, the implications of these proposed changes on the nation’s economic future will undoubtedly take centre stage.

    If you have any queries about the so-called back pocket boost, or New Zealand tax matters in general, then please get in touch.

    The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article