Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. The proposals announce a €2 billion workforce incentive plan for employers that will be a boost for workforce investment activities, both increasing new employment and securing the retention of employees. In the long-term, the Netherlands Government Budget Value is projected to trend around -3.00 EUR Billion in 2021 and 6.00 EUR Billion in 2022, according to our econometric models. To conclude, it will lead to the highest-funding need ever of EUR 124bn as shown in the graph below. The effective applicable tax rate in the innovation box regime will increase from 7% to 9%. Stay informed with e-mail newsletters from ABN AMRO. Further guidance is proposed to address certain overlapping situations of the Dutch anti-hybrid rules and the other interest deduction limitation rules. The proposals announce a €2 billion workforce incentive plan for employers that will be a boost for workforce investment activities, both increasing new employment and securing the retention of employees. To the extent these losses exceed €5 million, these will be restricted to subsidiaries or permanent establishments in a European Union (EU)/European Economic Area (EEA) country and only if the interest in the subsidiary/permanent establishment is more than 50% instead of at least 5%. Given the complexity of the matter and the potential impact on the overall Dutch tax regime, any changes to the fiscal regime will be left at the discretion of the new government (general elections will be in March 2021). The measure will be introduced as an amendment to the Proposals, and if enacted is set to enter into force by 1 January 2022. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The 2021 budget main points: The economy The economy will contract by 5% this year but will grow in 2021 by 3.5%, if there is no second lockdown National debt is set to top 60% of GDP Unemployment will reach 5.9% next year Spending power will rise by an average of 0.8%, with people in work benefiting from a 1.2% increase Increased spending on unemployment benefits will lead to a … The budget deficit is projected to be 7.2% of GDP in 2020 and will remain sizeable next year at 5.5%. “It’s like steering in mist,” he said. “In the labour market, where there is a big difference between people on permanent contracts and people on flexible contracts, the self-employed person’s tax allowance will be further reduced. SIA is the Global Advisor on Staffing and Workforce Solutions. Euro Macro: The Netherlands’ 2021 budget dominated by Covid-19 and elections – The Dutch centre-right Rutte III government presented its 2021 budget today.