Important judgment on tax classification of financial instrument
On May 17, 2024 the Dutch Supreme Court rendered an important judgment on the tax qualification of a financial instrument that was issued by a company established in France in 2007. It concerned the ‘obligation remboursable en actions’ (hereinafter: ORA). The question was whether the instrument had to be regarded as equity (capital) or debt capital (loan) for the purposes of the Corporate Income Tax Act 1969. Although the dispute focused on the question whether the costs related to the issue of the instrument were allocable to a Dutch permanent establishment of the French company, the Supreme Court judgment potentially has a much broader scope.
The legislative proposal aligns with the proposed EU Directive; in this respect, it is largely similar to the OECD Global Anti-Base Erosion (‘GloBE’) Model Rules.
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The bill introduces a reporting obligation for digital platform operators to provide the Dutch tax authorities with information about certain users (‘sellers’) on their platform.
