By Jian-Cheng Ku & Tim Mulder, DLA Piper Nederland N.V., Amsterdam
On December 27, the Dutch 2020 tax plan became law with its publication in the Dutch Gazette. The new law includes significant modifications to the taxation of multinational enterprises operating in the Netherlands.
The Dutch tax plan was presented by the government on September 17, 2019, as part of Budget Day. A detailed overview of the initial 2020 tax plan and relevant changes for multinational enterprises is presented in our MNE Tax article located at this link.
The changes include a reduction of the corporate income tax rate from 19% to 16.5% for taxable profits up to EUR 200,000 and the introduction of a definition of permanent establishment and representative in line with the definition in the OECD Model Convention 2017.
Further, the Netherlands has now implemented the EU anti-tax avoidance directive 2 (ATAD 2), targeting hybrid structures and, in particular, Dutch CV-BV structures.
The new law also includes an amendment to the anti-abuse measures in the Dutch corporate income tax act and the dividend withholding tax act to align these laws with the outcome of the European Court of Justice decisions in the so-called “Danish Cases”. These anti-abuse measures will be part of the introduction of the conditional withholding tax on intragroup interest and royalty payments to certain low-tax jurisdictions and for certain anti-abuse situations. The conditional withholding tax in itself will become effective as of January 1, 2021.
In addition to the adoption of the 2020 Tax Plan, the Dutch Senate also adopted a motion to research the simplification of the tax system.
In this motion, the government is requested to assess the simplifications of the recently implemented changes in the British tax system and to evaluate whether elements of these changes can be implemented in the Dutch system.
Jian-Cheng Ku
Jian-Cheng Ku advises on international tax law and transfer pricing with a particular focus on international tax planning, M&A and private equity transactions, corporate reorganisations, and planning and design of transfer pricing policies.
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Jian-Cheng Ku
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Tim Mulder
Latest posts by Tim Mulder (see all)
- Netherlands legislative proposal tackles transfer pricing mismatches - March 24, 2021
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- First Look: Dutch Tax Plan 2021 released - September 15, 2020
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- EU court assesses legality of Netherlands’ denial of German UCITS’s dividend withholding tax refund - February 11, 2020
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