Qualification of foreign legal forms*
The qualification policy of foreign legal forms is regulated by law. In terms of content, there will be some changes. Foreign legal forms that are comparable to Dutch entities will continue to be qualified based on the legal form comparison method. However, for foreign legal forms that are not comparable to Dutch entities, two additional methods are introduced: the 'symmetric method' and the 'fixed method'. Read more in our Tax News article on this topic.
Abolition of 'open CV' as non-transparent taxpayer*
The difference between open (= non-transparent) and closed (= transparent) CVs is no longer applicable. As of 2025, most CVs will be transparent. The aim of this measure is to reduce the number of hybrid mismatches in an international context.
The transition from a non-transparent to a transparent CV is regarded as a fictitious transfer and cessation. There are several transitional measures, among which are: a rollover facility, a share merger facility, and a deferral of payment. Read more in our Tax News Item on this topic.
Dividend tax repurchase facility for own shares likely to be retained after all
Last year, during the debate on the 2024 Tax Plan, it was determined by amendment that the dividend tax repurchase facility would be abolished by 2025. At the time, the government advised to keep the facility in place. The new government's Outline Agreement stipulates that the facility will indeed be retained. Also read our Tax News Item.
Changes to the FBI regime*
As of January 2025, Fiscal Investment Institutions (FBIs) are no longer allowed to invest directly in real estate located in the Netherlands. It remains possible for an FBI to be engaged in the management of a real estate entity associated with the FBI. It also remains possible to invest directly in foreign real estate. For this, the existing funding requirement remains as it was: the debt financing may not exceed 60 percent of the book value of the property. For other investments, debt financing is limited to a maximum of 20 percent of the book value of those investments. Also read our Tax News item on this topic (in Dutch).
Changes to the transparency rules of the FGR*
The conditions under which a mutual fund qualifies as an FGR, so an independent payer of corporate income tax (and as such is non-transparent) will change. A fund qualifies as non-transparent when:
- the fund can be regarded as an investment fund or fund for collective investment in transferable securities as referred to in Section 1:1 of the Financial Supervision Act; and
- there are negotiable units of participation.
A non-qualifying fund is transparent, and the assets are allocated and taxed directly to the investors with income tax or corporate tax. For the consequences and background, see our Tax News article (in Dutch).
Concurrence of the debt relief exemption and the set-off of losses
The concurrence between the loss compensation measure in the corporate income tax and the debt relief exemption (kwijtscheldingswinstvrijstelling) may in certain cases make it more difficult for a loss-making company to restructure, namely if claims against that company are waived. Due to the current loss relief rules, this write-off profit can still lead to corporation tax being levied despite the exemption. In the Spring Memorandum, it was announced that there will be an adjustment to the debt relief exemption.
Adjustment of liquidation loss scheme*
The so-called intermediate holding provision of the liquidation loss scheme prevents an operating loss of a participating interest or a non-deductible loss of sale from being converted into a deductible liquidation loss on an intermediate holding company. This provision will be amended/clarified, although it is not yet clear on which aspects.
Preventing the splitting up of real estate companies due to interest deduction
The splitting up of a company with real estate (leased to third parties) into several companies, with a view to deducting interest, will be prevented. By dividing a company into several smaller companies, it can be achieved that a larger amount of interest becomes deductible under the earnings stripping measure (also known as the EBITDA measure). Then the deductible of 1 million euros can be applied more often. It is proposed that the threshold of 1 million euros should not be applied altogether to such real estate entities.
Expansion of interest deduction due to increase in the percentage of earnings stripping measure
In the Outline Agreement, it has been announced that the percentage for the application of the earnings stripping measure will be increased from 20% to 25% of the fiscal EBITDA. Interest up to 1 million euros is not limited in deduction (at least not on the basis of this interest deduction limitation). On balance, this means that for certain companies there will be more room to deduct interest on loans.
General anti-abuse measure from ATAD 1
The general anti-abuse rule (GAAR) from ATAD 1 is to be laid down in Dutch tax law. This measure combats artificial arrangements designed to avoid tax improperly. The introduction of the GAAR was previously not considered necessary because of the possibility of combating abuse of the right with fraus legis. The legal enactment of the GAAR is not intended to make a substantive change in relation to the application of fraus legis.
Amendments to the subject-to-tax test under the CITA 1969*
For the application of the subject-to-tax tests in corporate income tax (e.g. for the participation exemption), it is important to know whether the minimum tax (Pillar Two) counts as a 'tax levied on profit'. This must be made clear by means of amendments to the law or an explanatory memorandum.
A new group concept in the Withholding Tax Act 2021*
The affiliation between entities is a prerequisite for the levying of withholding tax. This is determined by the presence of a so-called qualifying interest. This qualifying interest can also be determined on the basis of the presence of a so-called cooperating group. In practice, the effect of the concept of a cooperating group is in many cases unclear. It is therefore proposed to replace the term 'cooperating group' in the Withholding Tax Act 2021 with a new and separate group concept.
Objection to dividend withholding tax exemption becomes possible
The optional withholding exemption for dividends from participations to which the participation exemption applies or which are part of the same fiscal unity for corporate income tax purposes will become a mandatory withholding exemption. An important consequence is that shareholders who have been subject to dividend withholding tax can now object to the withholding. In this way, they will have access to the tax court.
First Public CbCR report for most companies in 2025*
On 22 June 2024, the Dutch Profit Tax Disclosure Directive (Public Country-by-Country Reporting) Act came into effect. This is an EU-initiated, mandatory, public reporting for large, international companies. Among other things, the profit tax paid, the number of employees and the income per country must be reported.
Reporting will start for financial years beginning on or after 22 June 2024. For companies that have a financial year that is equal to the calendar year, this means that they will first report on 2025. This report must then be made public by 31 December 2026 at the latest. Read more about public CbCR in the Netherlands in our Tax News article.
