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.

Newsoverview (5)

Supreme Court: conversion of former wool factory into shopping mall results in ‘essentially a new building’ for VAT purposes

November 14, 2022

In its judgment, the Supreme Court reconfirmed that it is decisive whether or not the building has undergone structural construction alterations.

Dutch Supreme Court persists with strict interpretation of actual use for VAT recovery right purposes

November 11, 2022

This case is not only relevant for financial institutions, but also for other taxpayers performing VAT-taxed and VAT-exempt services.

Supreme Court answers questions about concept of ‘essentially a new building’ for VAT purposes

November 4, 2022

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.

Transfer of leased building by developer classified as transfer of going concern for VAT purposes despite earlier decision

May 31, 2022

The Arnhem-Leeuwarden Court of Appeals delivered two important rulings for the Dutch real estate practice on May 17, 2022.

Group company not a fixed establishment for VAT purposes, but CJEU has left the door open

April 11, 2022

The CJEU provided more guidance on the circumstances in which the human and technical resources of an independent legal entity could result in a separate fixed establishment.

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