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.
In practice, large amounts in dividend tax are avoided via various forms of dividend stripping, which the Dutch tax authorities cannot properly combat with the legal instruments currently available to ...
In particular, the Supreme Court answered several outstanding questions about Section 10a Corporate Income Tax Act 1969, such as when is there an ‘intra-group (non-business motivated) diversion’.
The most important changes are the incorporation of the results of the OECD’s BEPS project and the source exemption that was introduced into the Corporate Income Tax Act 1969 in 2012.
The changes to the Decree are mainly a reaction to the changes made to the OECD guidelines in respect of financial transactions, intra-group services and recent OECD publications on the treatment of g ...
The policy statement sets out how rights will be restored in Box 3 and how the new Box 3 income will be calculated according to the flat rate savings option.
The planned tax measures include a reduction in the step-up corporate income tax bracket, the introduction of two tax brackets in Box 2, a cap on the 30% ruling and an increase in the general real est ...
The letter sent to the Lower House of Parliament on April 28, 2022 explains which option for restoring rights will be offered and which group of taxpayers will, for the time being, be eligible for thi ...
