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 draft bill contains accompanying measures to avoid the (immediate) levying of corporate income tax, personal income tax and real estate transfer tax.
An internet consultation on a draft bill to abolish the property transfer tax concurrence exemption for share transactions was launched on February 27, 2023.
The preliminary ruling shows that, for ‘essentially a new building’ to have been created, there must have been alterations to the structural construction as a minimum.
The Supreme Court based its conclusion on a formal interpretation of the term ‘interest’ in the Legal Transactions Taxation Act and thus ruled differently to the Court of Appeals ‘s-Hertogenbosch, whi ...
The judgment rendered by the Court of Appeals ‘s-Hertogenbosch could also be important in practice with regard to shares in real estate legal entities that are acquired by investment funds without leg ...
This is a favorable outcome for the real estate market. The acquisition of (an apartment right in) a converted building intended for residential use is more likely to be subject to 2% rather than 6% r ...