![]() In order to avoid tax loss utilization schemes, a special restriction applied to the carry forward of tax losses by Dutch Holding Companies. Up to and including 2018, specific limitations applied for the carry forward and carry back of tax losses by Dutch Holding Companies (and group finance companies).ĭutch Holding Companies generally have a negative tax base as a consequence of applying the participation exemption: income from shares in subsidiaries is exempt, whereas expenses (in particular interest expenses) are in essence tax deductible. Abolishment of the restriction for the offset of tax losses by Dutch holding companies Losses incurred before 2019 can still be carried forward for a maximum of nine years. The term for carry back stays the same (at one year). The maximum period for the carry forward of tax losses will be reduced from nine (9) to six (6) years. In the next years the Dutch corporate income tax rate will be gradually be reduced as follows: Reduction the Dutch corporate income tax rate Various conditions must be met for this exemption, but generally speaking foreign corporate shareholders which hold 5% or more of a Dutch corporation can qualify for this exemption, provided the general anti-abuse clause (main-purpose test) does not apply. The foregoing does not change the fact that since April 2018, the Dutch Dividend Withholding Tax Act provides for an unilateral exemption at source for dividends declared to foreign corporate shareholders. The subsequent extra budget is (partly) used to facilitate an extra reduction of the Dutch corporate income tax rate (see below). The proposal to abolish the Dutch dividend withholding tax, was subsequently heavily debated in Parliament, and ultimately the Government withdraw the plan to abolish the dividend withholding tax (and the introduction of an alternative withholding tax for dividends). On 18 September 2018 the Dutch Government presented the 2019 Budget Proposals including the Tax Plan 2019, which included some quite extraordinary amendments of Dutch tax laws, including the proposal to abolish the Dutch dividend withholding tax, with a simultaneous introduction of an conditional withholding tax for dividends (as form 2020), interest and royalties (as from 2021). Alternatively, we would ofcourse also be gladly prepared to advice you on the consequences of the new rules. Please consult your Dutch tax advisor to clarify the impact of the changes on the Dutch tax position of your company. This is a list of the main tax changes of the Dutch corporate income tax regime per 1 January 2019, but it is not meant to be comprehensive. Abolishment interest deduction for Tier 1 capital instruments (AT1, CoCo bonds).Restriction tax depreciation of buildings in own use.Introduction CFC- rules (recognition non-distributed passive income of controlled foreign subsidiaries). ![]() Introduction earnings stripping rule (general limitation interest deduction).Abolishment of the restriction for the offset of tax losses by Dutch holding companies.Reduction the Dutch corporate income tax rate.No abolishment dividend withholding tax.
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