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Dutch King Swears In New Coalition Government

“to make a strong country even stronger… investing in the individual, for the common good”

King Willem-Alexander with the new ministers on the steps of Palace Noordeinde in The Hague | photo: RVD (Valerie Kuypers)

Today, at a ceremony in The Hague, King Willem-Alexander gave his seal of approval to the newly formed Dutch government, consisting of 16 ministers and 8 secretaries of state. The new cabinet’s ambition is “to make a strong country even stronger… investing in the individual, for the common good.”

Confident coalition

“People, not numbers,” is the key message presented by the newly-formed coalition government of the Netherlands in its vision for the future, with key funding areas identified as infrastructure, research, innovation, digitization and attractive business climate. After taking a record 209 days to form the new coalition, the center-right cabinet, led for a third term by Minister President Mark Rutte, announced its Coalition Agreement 2017 – 2021 titled ‘Trust in the Future,’ on 10 October 2017.

Competitive location

The new government, which emphasized its “inseparable bond with the EU,” has sharpened its focus on measures that make the Netherlands an attractive and highly-competitive location for foreign companies looking to set up business in Europe. Immediate actions include tax cuts for companies that have helped the Netherlands through the crisis during the past several years.

The basic rate of corporation tax above 200,000 euros is to be reduced from 25% to 21%, while a tax rate of 16% will be levied on the first 200,000 euros in profits – a reduction of 4 percentage points from the current level. These tariff reductions will have a phased introduction: in 2019 the tariffs will be reduced by one percentage point, in 2020 by a further 1.5 percentage points and in 2021 again by 1.5 percentage points. So, in 2021, the tariffs will be 21% and 16% respectively.

Red-tape reduced

Additionally, the 15% dividend tax is to be repealed with the aim of attracting foreign businesses and decreasing administrative red tape for Dutch businesses. Regarding mobility, an extra 2 billion euros has been allocated for upgrading and greening of infrastructure, roads, public transport and cycle paths.

Labor law loosened

On the labor front, a number of measures are being proposed with the intention of making the business of hiring and firing less complex. The cabinet stated that it wants to strike a new balance between flexible and permanent contracts, making it more financially attractive and less risky for employers to offer people a regular employment contract.

As a result, the period after which a preliminary contract officially becomes a full-time contract will be extended from two, to three years. For subsequent contracts, although the current statutory waiting-time is six months before a new contract can be awarded, there will be possibilities to shorten that.

Forward momentum

The new agenda is aimed at moving the country forward. The four parties in the new coalition – the VVD, CDA, D66 and ChristenUnie – are aligned in the view that the investment of billions of euros will only be meaningful once millions of people actually benefit from it.

26 October 2017

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