title: Dutch government rolls out carpet for business with tax cuts
text: AMSTERDAM (Reuters) - The incoming Dutch government rolled out the red carpet for big business on Tuesday, firming up plans to lower the corporate tax rate to 21 percent and scrap a 15 percent tax on dividends. As part of the biggest tax overhaul in years, it also introduced a tax on royalties in a bid to counter a reputation for abetting tax avoidance by housing shell companies that act as a conduit for money destined for tax havens.  I do feel we should be much tougher on mailbox companies ... and we are going to do that,  Prime Minister Mark Rutte told a news conference at the parliament building.  At the same time if there are serious companies that want to have their headquarters in the Netherlands, we d love to have them,  he said. He said Britain s decision to leave the European Union gave the Netherlands a chance to attract firms based in Britain but seeking a European headquarters. The corporate tax rate will be lowered incrementally each year. Other proposals are targeted to go into effect by 2019, after approval by parliament. The Netherlands is favored by multinationals and is currently battling a fine from the EU for giving Starbucks tax advantages that amounted to state aid. Google and Apple route money there and reinvest it abroad rather than repatriating it to the United States where it would be subject to higher tax rates. The Netherlands is also popular with rock stars such as the Rolling Stones and U2 who until now have benefited from the country s favorable treatment of royalties. Tax experts said the package of reforms was a mixed picture.  Reducing the corporate tax benefits all businesses and getting rid of dividend withholding is aimed at making the Netherlands more interesting for foreign investors,  said Rudolph de Vries, a tax adviser at Ernst & Young and professor at Leiden University. He said the reduction in corporate taxes will be partially offset by another reform in the works: a move to limit the deductibility of debt. Marcel Klok, senior economist at ING, said the rules will lead to about 1.3 billion euros in missed tax revenues from  foreign companies, to a large extent due to the abolition of dividend taxes.  He noted the lower corporate tax rate of 21 percent, while a significant cut from 25 percent, is just slightly below the EU average of 21.5 percent.  It seems like the Netherlands is shifting towards doing what the OECD and other international partners are asking for, so going in the direction of having less exemptions,  he said.  But because they are reducing some tariffs and other measures the net effect is very beneficial for foreign firms to come and invest here.  Alexander Pechtold, the leader of one of the junior parties in Rutte s new four-party coalition, said mailbox companies and others taking advantage of loopholes in the tax code  will be better off elsewhere .  You have these singers who are doing all these fabulous charitable things from the money they are not paying in taxes,  he said.  We will now take care of the charitable causes ourselves directly, without the singers in between.  