Since 2015, entrepreneurs in a shopping area or industrial estate can make a joint request to the municipality for taxation when they, for example, want to finance a collective investment in solar panels or decorate the shopping area with Christmas lights. The intended activities of the entrepreneurs are laid out in an activity plan, after which the municipality, upon request and following a vote among all involved entrepreneurs, imposes a tax assessment (BIZ contribution). The Erasmus Study Centre for Local Government Taxes (ESBL) has studied this collective form of investment. The report "Room for Ambition of Business Investment Zones" evaluated the experiences of the involved BIZ organizations and made proposals for improvement.
A BIZ contribution starts with an initiative from a group of entrepreneurs who want to organize certain joint activities. The initiators request the municipality's cooperation in shaping a BI zone. Subsequently, the municipal council establishes a tax regulation for BIZ contributions. The municipality then organizes a legally required vote among the involved entrepreneurs located in the intended BI zone. Only if there is sufficient support for implementation, the BI zone is established, the tax regulation comes into effect, and a BIZ contribution is levied on the entrepreneurs in the area for a maximum of five years. Each owner or user of a business property pays the annual BIZ contribution, and the municipality annually transfers the proceeds as a subsidy to a BIZ association or foundation established for this purpose. The association or foundation then implements the activity plan. Compared to a voluntary contribution to a business association, the significant advantage of the BIZ contribution is that all entrepreneurs are obligated to contribute (there are no free riders). After all, it is a tax.
Report
The Business Investment Zones Act (Wet BIZ) has existed since 2015. Since then, numerous BI zones have been established in multiple municipalities. In 2019, there were about 300 BI zones in 106 municipalities. The ESBL conducted research on the functioning of BI zones at the Amsterdam municipality's initiative. Additionally, the municipalities of The Hague and Rotterdam, along with several organizations with experience in establishing and implementing BI zones, were involved in the research through an advisory group. The focus is on the results of a survey conducted in 2022, which 118 BIZ organizations completed.
The respondents were asked about their experiences with the BIZ scheme and their opinions on several proposals for adjusting and improving the BIZ scheme. As the vast majority of responding organizations are active in city centres and shopping areas, the results of this research are mainly representative of BI zones in those areas and less so for BI zones in industrial estates. Currently, the ESBL is conducting research, commissioned by the Ministry of Economic Affairs and Climate, on the functioning of BI zones, specifically in industrial estates. In addition to the survey results, the research report contains several proposals for improving the current BIZ Act. One of the proposals is to differentiate between new BI zones and ongoing BI zones. For ongoing BI zones, broader legal possibilities could be introduced under certain conditions. For instance, they should be able to choose a longer maximum duration than five years. Another proposal is to offer ongoing BI zones that wish to continue unchanged after five years the possibility of extension for several years without a support assessment.
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Lees hier het rapport: 'Ruimte voor ambitie van bedrijveninvesteringszones'
