Netherlands: Tax Reform to Counter Tax Avoidance Approved by the Council of Ministers

Local tax news

​Netherlands - Tax Reform to Counter Tax Avoidance Approved by the Council of Ministers
​The Council of Ministers agreed to align national laws with EU anti-avoidance rules. The most important amendments are the following:
(i) to implement the EU Anti-Tax Avoidance Directive (EU) 2016/1164;

(ii) to re-introduce thin capitalisation rules (to restrict the deductibility of interest to a maximum of 30% of EBITDA);

(iii) to introduce CFC legislation. CFC rules will apply if a Dutch company owns more than 50% in a foreign company, and if the foreign company is taxed at a rate which is less than half the Dutch rate;

(iv) to implement rules against hybrid mismatches by 2020;

(v) to introduce in 2021 a withholding tax on interest, dividend and royalty payments to low tax jurisdictions, non-cooperative jurisdictions and in abuse situations (artificial structures);

(vi) to include anti-abuse provisions and principle purpose text to all Dutch tax treaties; and

​(vii) to amend its Transfer Pricing Decree in line with the OECD - Transfer Pricing Guidelines for MNEs (2017).

Other news

​Ifric 23 - Uncertain Tax Positions
On January 1, 2019, Ifric 23 – Uncertain Tax Positions will enter into force. This will require companies to collect certain data concerning Uncertain Tax Positions, update and keep track of them over time.
 
Ifric 23 requires that companies update data regularly and recalculate the positions according to the Ifric 23 framework. We can now offer a module to help companies to set up a robust process for collecting and keeping track of the required information and documentation by:
 
(i) helping to comply with a formalized process for collecting Ifric 23 data;
 
(ii) documenting positions and changes to positions;
 
(iii) presenting and allow searches of Ifric 23 data;
 
(iv) helping to set up a process for efficient collection with clear roles and responsibilities; and
 
(v) providing a full audit trail to keep track of changes.
 
To find out more or to request a demonstration please contact [email protected].