On December 30, 2014 the Deputy Minister of Finance published a policy statement whereby requests for a fiscal unity of sister companies of a European parent company or a fiscal unity between a domestic parent company and domestic sub-subsidiaries held through one or more European intermediate holding companies will be granted under certain conditions.

This policy statement follows three judgments by the Court of Appeals Amsterdam on December 11, 2014 which concluded that Dutch legislation on the fiscal unity for corporate income tax purposes is contrary to the European freedom of establishment. For more information about this, see My Tax News published on December 11, 2014. These judgments follow a decision by the Court of Justice of the European Union (“CJEU”) on June 12, 2014 in response to the request for a preliminary ruling that the Court of Appeals Amsterdam had submitted to it in these proceedings, one of which was instigated by Meijburg & Co on behalf of one of its clients. Below, we will elaborate on the recent policy statement, as well as on its practical implications.

Content of policy statement

The policy statement includes an amendment to the corporate income tax fiscal unity regime and an approval whereby – in anticipation of amendments to legislation – requests may be granted for the creation of a fiscal unity between:

  1. domestic sister companies that are held by a top company from another Member State of the European Union (fiscal unity of sister companies);
  2. a domestic sister company and a domestic sub-subsidiary that is held by an intermediate company from another Member State of the European Union (fiscal unity between parent company and sub-subsidiary).


Nothing changes for existing fiscal unities, however.

Re 1

In this context, a top company refers to a public limited liability company (“NV”), private limited liability company (“BV”), a cooperative or mutual society or a similar entity from a country with which the Netherlands has concluded a qualifying tax treaty. The entity must also:

  • be resident in a Member State of the European Union (EU) or the European Economic Area (EEA) and not be resident in the Netherlands. Furthermore, it must not be deemed to be resident in a non-EU/EEA Member State by virtue of a tax treaty concluded between the Member State of residence and a third country;
  • subject to tax on profits in the Member State of residence, without choice and without being exempt;
  • directly or indirectly hold through one or more foreign intermediate companies 95% or more of the shares in at least two taxable entities resident in the Netherlands.

There is a free choice of which sister company is to be regarded as the parent company of the fiscal unity. This choice must be made at the time of the request or, if that has not already been done for previously submitted requests, as soon as possible after publication of the decision. Once the fiscal unity has been created, this request can no longer be reconsidered. In the case of an inclusion during the course of the year, the entities to be included close their financial year immediately prior to the establishment of the fiscal unity. The activities and assets of the sister company that is regarded as a subsidiary subsequently form part of the activities and assets of the sister company that is designated as parent company. This leads to a tax-exempt equity increase for that parent company.

Re 2

An intermediate company refers to a public limited liability company, private limited liability company or a similar entity from a country with which the Netherlands has concluded a qualifying tax treaty. The entity must also:

  • comply with the residence requirements as referred to under 1 above;
  • comply with the taxpayer requirements as referred to under 2 above;
  • be directly or indirectly held by one or more entities that are included in the fiscal unity;
  • directly or indirectly hold at least 95% of the shares in one or more companies that are taxable in the Netherlands.

If a fiscal unity is created though an intermediate company, the participation exemption continues to apply to the interest in the intermediate company as if no fiscal unity existed. The activities and the assets of the sub-subsidiary become part of the activities and assets of the parent company, which consequently changes by the carrying amount for tax purposes of the subsidiary’s assets. This leads to a tax-exempt equity increase for the parent company.

The policy statement took effect on December 31, 2014 and has retroactive effect to December 16, 2014.

Commentary by Meijburg & Co

According to the policy statement, nothing will change for existing fiscal unities. The conditions stipulated in this policy statement will presumably also apply to requests that were filed before December 16, 2014. Furthermore, it remains to be seen whether foreign companies can also invoke the policy statement insofar as they have a permanent establishment in the Netherlands. The policy statement does not explicitly address this.

Incidentally, requests for a fiscal unity must still be submitted within three months of the start of the financial year in order to apply the fiscal unity regime from the beginning of that financial year.

Click here to download the memorandum in pdf format