On 28 November 2019, the Dutch State Secretary of Finance published a (draft) decree including changes of the Decree to the International Assistance with Levying Taxes Act (Uitvoeringsbesluit internationale bijstandsverlening bij de heffing van belastingen) (Decree). Pursuant to legislation introduced as from 1 January 2014 (article 3a section 7 of the Decree) a qualifying corporate income tax (CIT) payer has a statutory obligation to disclose in its CIT return whether it continuously meets during the entire year the substance requirements mentioned in the Decree in case the taxpayer did make or could have made use of any benefits offered by a tax treaty in the fiscal year under review. As expected, financial service companies will become subject to the following additional substance requirements:
The date of the possible amendment is yet unknown. The above-mentioned additional substance requirements are already part of other Dutch substance rules (i.e. Dutch controlled foreign company, Dutch dividend tax exemption and Dutch non-resident corporate income tax (CIT) rules). In contrary to the other Dutch substance rules, the Dutch State Secretary of Finance mentioned that a tax payer has no possibility to provide evidence to avoid disclosure of information under the application of the Decree.
As per 1 January 2014 certain statutory disclosure requirements for financial service companies have been introduced. In case the qualifying CIT payer does not meet one or more of the substance requirements it has to disclose this information in its CIT return. This information will be exchanged by the Dutch tax authorities to the relevant source country. Failure to comply with any of these information requirements is an offence, which may result in a penalty being imposed amounting to maximum EUR 20,750 (applicable in 2019) in case of premeditation or gross negligence. A qualifying CIT payer is any CIT payer of which the activities mainly (70% or more) consist of the direct or indirect receipt and payment of interest, royalties, rent or lease terms, in any form whatsoever, from and to non-resident entities which belong to the same group as the taxpayer. For the assessment of the 70% criteria, holding activities are not taken into account.
Current substance requirements:
In the wake of the developments concerning the COVID-19 / Coronavirus, BUREN has adjusted it’s policies to ensure that our services and responsiveness
Peter van Dijk and IJsbrand Uljée had the opportunity to write the Dutch chapter in the ICLG "International Comparative Legal Guide to: Corporate Tax 2020".
On the 25th of April we were honored and proud to have welcomed a delegation of the Ministry of Justice headed