Because of a recent judgement (February 22th, 2018) of the European Court of Justice, the Dutch Ministry of Finance will introduce various emergency measures to the Dutch tax grouping regime. These measures will apply retroactively from October 25th, 2017 and will limit the advantages of a Dutch tax grouping regime.

The main reason for these changes is the anticipated negative budgetary impact of the Court’s decision. The court ruled that the various advantages of the Dutch tax grouping regime should not only be limited for domestic situations. The benefits should also be extended to cross border situations involving foreign subsidiaries.

High Level Overview Legislative Changes

The existence of the Dutch tax grouping regime will be ignored in various situations to determine (inter alia):

• The level of non-deductible interest
• The availability of losses in the event of a substantial change of the shareholder
• The application of the Dutch participation exemption
• The reduction of Dutch dividend withholding tax

Impact Tax Payers

It is anticipated that these new rules will have a significant negative impact for many tax payers that are part of a Dutch fiscal unity. We would recommend reviewing the impact of the new rules for each Dutch tax group.

For more information please contact Guido van Asperen (+31 70 365 66 17 or guido.van.asperen@fisconti.nl).