19 June 2019

The Netherlands: changes to the international tax ruling practice

On 23 April 2019, the Dutch State Secretary of Finance published a policy Decree on the new Dutch international tax ruling practice. The Decree will enter into force effective 1 July 2019. The Decree contains guidelines on the procedure, the content as well as transparency considerations. The key feature of the new tax ruling practice, is that it has been brought in line with the OECD’s recommendations against Base Erosion and Profit Shifting (BEPS). 

This alignment with the BEPS recommendations appears most notably from the fact that under the new policy, it will no longer be possible to conclude international tax rulings if:

  1. The group as a whole and the Dutch company that requests the ruling, do not have sufficient economic nexus with the Netherlands;
  2. The main motive for the entering into the transaction(s) is to save Dutch or foreign taxes;
  3. The ruling relates to the tax consequences of direct transactions with certain low taxed jurisdictions.

The Decree reflects changes already announced in November 2018. In addition, a list of 12 examples was published to illustrate how the new policy will be applied. Going forward, new actual situations will be published to clarify the application of the policy. In addition, the procedure to conclude a ruling will be amended.

 Peter Wurzer from Auren The Netherlands

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