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On May 29, 2017, an amendment to the EU Anti-Tax Avoidance Directive was adopted, so that this directive also focuses on combating hybrid mismatches between EU Member States and third countries (ATAD2). We had already paid attention to this in our previous memorandum. On October 29, 2018, the government launched an internet consultation to give interested parties the opportunity to respond to the draft bill to implement ATAD2. This bill and the changes it will entail for corporate income tax are discussed below. 

On November 8, 2018, the Court of Justice of the European Union (hereinafter: CJEU) rendered judgment in the C&D Foods case (C-502/17). The case concerned the recovery of VAT on costs related to a proposed, but ultimately not realized, sale of shares. 

In a letter sent to the Lower House on November 22, 2018, the Deputy Minister of Finance outlined the main features of the revision of the ruling practice. The revision is aimed at further safeguarding the quality of the ruling practice for businesses with activities of substance as well as enhancing its robustness. 

The change to the zero VAT rate for the delivery and provisioning of seagoing vessels and the performance of services to seagoing vessels had already been announced in the 2018 Tax Plan and was originally intended to take effect on January 1, 2018. H

On December 4, 2018, the Economic and Financial Affairs Council of the EU (ECOFIN) held an exchange of views on the digital services tax, but failed to reach an agreement on a compromise text tabled by the Austrian Presidency of the EU. Member States also had the opportunity to comment on a last minute proposal presented by France and Germany that would reduce the scope of the tax to revenues for advertisement only

For Dutch corporate income tax purposes, the costs related to the acquisition or disposal of shares that are covered by the participation exemption are non-deductible. On December 7, 2018 the Dutch Supreme Court rendered judgment in a case specifically concerning the sale of a participation. 

The salary criterion for highly skilled migrants is contained in the Foreign Nationals Employment Act Implementation Decree (Besluit uitvoering Wet arbeid vreemdelingen). This also stipulates that salaries are to be adjusted annually with effect from January 1 on the basis of recent index figures for negotiated wages, as published by Statistics Netherlands.

In the final Dutch VAT return of 2018 a VAT correction should be made on the basis of the VAT Deduction Exclusion Decree (“DED”) and the private use of company cars. In that context we have updated our memorandum regarding the VAT correction on promotional gifts and other benefits, such as staff benefits. Furthermore, the VAT correction based on the private use of company cars is described.

‘No-deal scheme’

The government has decided that UK citizens and their family members who lawfully reside in the Netherlands before Brexit will also retain their right of residence in the event of a ‘no deal’. Brexit means considerable uncertainty for the many UK citizens living in the Netherlands. The announced transitional rules will finally make clear for this group where they stand. 

As of January 1, 2019 new VAT rules apply to vouchers, stamps and tokens. The new rules are a result of the EU Voucher Directive, which is designed to harmonize the VAT treatment of vouchers within the EU. Until recently, there were no specific rules for the VAT treatment of vouchers in the Netherlands and other EU Member States.