Annex A. Progress in structural reforms

Increase tax efficiency, notably by accelerating the reduction of mortgage interest rate relief and phasing out lower VAT rate, while keeping the tax reform fiscally neutral.

As planned in the Coalition Agreement income tax rates will be lowered, which will be partly financed by an increase of the lower VAT rate from 6% to 9%. In addition, the decrease of the mortgage interest rate deductibility will be accelerated.

Reconsider the degree of tax incentives for self-employed, and explore alternatives for ensuring they build adequate savings for disability, and ageing risks if needed.

The Coalition Agreement has proposed reducing the tax incentives for self-employment by gradually decreasing the maximum tax rate against which those incentives can be deducted. The government will also explore ways in which the rate of disability insurance among self-employed can be increased.

Continue to actively participate in international negotiations about coordinated action to combat tax base erosion and profit shifting (BEPS) of multinational enterprises and, within this international context, take appropriate domestic measures to support such action.

The Netherlands is one of the few countries intending to agree on all options of the multilateral treaty (BEPS), and is also implementing the EU ATAD-directive with appropriate measures.

Further improve the risk-equalisation scheme to reduce insurers’ incentives for risk selection, particularly in view of the government’s intention to terminate ex post compensations before 2015.

Further improvements have been carried out. No signs of risk selection have been observed. Ex post compensations have been terminated.

Lift the current capacity constraints (numerus fixus) for medical schools and facilitate the recognition of foreign diplomas from outside Europe.

No action taken.

Allow for-profit hospitals to enter the hospital market. In addition, the orderly exit of bankrupt hospitals should be secured via measures to guarantee access to essential facilities.

No action taken.

Health insurers should not receive more responsibility for purchasing care until they are given proper incentives for cost-efficiency. In the longer term, the decentralisation of home care to municipalities could be completed and institutional patients should directly choose their care provider to push institutions to compete on quality to attract patients.

The incentive structure for insurers has remained unchanged. The decentralisation to municipalities is underway and good progress is being made. Providers of institutional care are increasingly dependent on the choice of patients and their relatives, although waiting lists somewhat hamper the selection process.

Keep the cash benefits scheme for home care but combine it with better screening and monitoring to avoid unintended use. To this end, a system of vouchers directly payable to professionals and topped up by co-payments should be envisaged

Unintended use has been reduced by means of the introduction of centralised accounts in combination with the right for recipients to draw on their personal benefits.

Broaden access to academic research and increase the share of direct innovation grants to SMEs.

Tax incentives remain the primary instruments to promote R&D by SMEs. Two thirds of the financing of the WBSO tax incentive scheme is accounted for by SMEs. The Innovation Credit can also provide up to 50% of the cost of an innovation project for SMEs.

As planned in the Coalition Agreement, financing for R&D funding schemes for SMEs and more intensive of the Small Business Innovation Research Programme.