Tax discount during startup phase

How do you prevent people (startups and non-startups alike) from abusing this? i.e., re-incorporating every 3 years or similar schemes

It is well recognized by economists (excluding pseudo communist economists) that Corporate Income Tax is the less efficient form of collection (or theft if you prefer), as it disincentivizes (or even prohibits) savings for future greater investments — companies are forced to apply every year’s profit or they will be collected.

There’s no process of civilization without accumulation of durable or capital goods — goods that facilitate/increase production of other goods. This legislation clearly increases time-preference, i.e. it incentives present consumption or waste* in detriment of future production (and thus consumption) — decivilization.

European Union currently sets a minimum of 12% for this tax. No UE country can tax less than that to their private enterprises (groups of people that freely get together to produce a good or service).

This minimum is utterly ridiculous and should be deleted.

\* This is usually the case in public enterprises whose next-year’s budget depends on how much they spent in current year. Because they don’t want to loose budget, they usually waste resources at the end of the year.

This doesn’t make sense, most startups will make a loss during the first years, so defacto already don’t pay any corporate tax. There should be an income tax discount instead.

What would be the qualifying criteria? What other details need to be considered to avoid exploiting this by existing businesses and corporate sharks?

I agree mostly with other commenters that this seems easy to abuse. Also I dont think the corparate tax is the limiting factor as usually you dont have a huge profit the first years anyway.

Remove EU minimum tax rates (a subsidy on government incompetence), let member states compete with each other on the basis of service and cost to operate in a jurisdiction, shame anyone who uses the slur ‘tax haven’

In some EU countries tax is 35% for locals and effective 5% for foreign owned companies. It is meant to attract foreign investment but ends up hurting entrepreneurs, especially younger founders who may not yet have a sufficiently broad network to take advantage of this.

One of the biggest tax burdens for startups in The Netherlands is the employer tax, which adds ±40% on top of gross salaries. While there are discounts available for tech companies, managing these is a huge administrative burden. My companies outsource this to a consulting firm, which takes 10% of the discounted amount.

A smarter system would phase in employer taxes gradually. For example, they could start applying from the 6th employee, with the full tax rate kicking in after the 20th. This would encourage early-stage businesses to scale without being taxed so heavily while they're still small. The current approach makes it a lot harder for businesses to create some kind of escape velocity.

Also, these high taxes make Dutch employees less attractive to hire, especially when combined with the heavily protected employment environment and new regulations targeting false self-employment of freelancers (it's becoming way harder to work with freelancers due to these new regulations). Companies with significant non-EU revenue are tempted to move operations overseas to escape this tax burden, meaning they're also taking their profits and economic activity with them.

I think 5 might be ideal. Plenty of time to do all the needed stuff