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 fact that the right to use software can itself fall within the VAT exemption is a welcome clarification for Dutch practice in light of the increasingly automated asset management market.
This is our third FS Tax Newsletter for the year, in which we have summarized the most recent tax-related developments of the last two months in the FS sector for you.
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