On April 14, 2017 the Dutch State Secretary for Finance sent information on the Dutch ruling practice to the Dutch House of Representatives. In the letter the State Secretary for Finance furthermore addresses questions that were raised by Members of the House of Representatives in this respect.

Unfortunately the letter is only available in Dutch and it is 28 pages long. Below we do our best to provide some of the information that is included in the letter.

In his letter the State Secretary provides a.o. an overview of the subjects for which the so-called ATR/APA team provides certainty in advance. According to the State Secretary the Dutch tax authorities currently provide certainty in advance with respect to the following subjects:

·   The application of the participation exemption for intermediate holding companies in international structures and for top holding companies in case non of the subsidiaries of that top holdings conducts business activities in the Netherlands;

·   Regarding international structures which make use of hybrid forms of financing or which make use of hybrid entities;

·   Whether or not a non-resident entity has a permanent establishment in the Netherlands or in the BES-islands as meant in Article 17, Paragraph 3, sub a of the Dutch corporate income tax Act (DCITA);

·   The application of Article 17, Paragraph 3, sub b of the DCITA (the so-called aanmerkelijk belangregeling);

·   Whether or not an entity that is a resident of either Aruba, Curaçao or Sint Maarten has a permament establishment on the BES islands as meant in Article 17, Paragraph 3, sub c of the DCITA;

·   The allocation of a shareholding to a permanent establishment that an entity has in either the Netherlands or the BES islands;

·   Whether or not an entity conducts an enterprise as meant in Article 17a of the DCITA;

·   Whether or not a coöperaties (cooperative) have to withhold dividend withholding taxes; and

·   The determination of an at arm’s length remuneration or of a method to be used for the determination of such remuneration for cross-border transaction between related entities and the allocation of profits to a permanent establishment of entities as meant in Article 8b of the DCITA.

With respect to the abovementioned the State Secretary states that hybrid financing in relation to the participation exemption (as described in a previous note) does no longer occur since January 1, 2016 because of a change in the regulations of the participation exemption. The State Secretary furthermore states that the other manifestations do still occur in the practise but the hybrid mismatches, including the CV/BV structure, will be neutralized as per January 1, 2020 by applying the EU Directive on hybrid mismatches with third countries. Furthermore according to the State Secretary if certainty in advance is granted, exchange of information is provided to the foreign tax authority in this respect.

Furthermore the State Secretary has updated the overview of the number of APAs/ATRs that have been granted/denied per year that he sent to the House of Representatives on February 2, 2015 by adding the numbers for the years 2015 and 2016.

Click here to be forwarded to download the information as sent to the Dutch House of Representatives by the Dutch State Secretary of Finance on April 14, 2017 from the website of the Dutch Ministry of Finance. (The document comes in a downloadable Pdf format)

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