(February 2, 2015)
On February 2, 2015 the Dutch State Secretary for Finance sent a letter to Dutch Parliament providing them with information regarding the Dutch tax ruling practice. Those hoping that the Secretary of State would provide the Dutch Parliament with lots of detailed information regarding specific advance rulings granted by the Dutch tax authorities will be disappointed.
In his letter the Secretary of State states that he acknowledges the importance of the Dutch Parliament being able to perform its democratic obligation/right to review whether the Dutch tax authorities do their job correctly. He furthermore states that he wants to be as open as possible regarding the Dutch tax ruling practice, especially since questions have arisen regarding the Dutch ruling practice. At the same time the Secretary states that this openness should not be harmful to the interests of tax payers. Because of the latter in his letter the Secretary limits the information he provides to information of a general nature.
The Secretary a.o. states that the importance of an advance ruling is that a tax payer can get upfront certainty. According to the Secretary advance rulings are meant to provide upfront certainty, but at the same time they always stay within the borders of the law. He furthermore gives some examples of questions regarding which an advance ruling can be obtained in the Netherlands:
· Do the anti-abuse clauses included in the Dutch participation exemption apply to a shareholding in a foreign entity?
· Do the activities performed by a foreign entity constitute a permanent establishment in the Netherlands?
· Does something qualify as equity (remuneration not deductible/not taxable) or as a liability?
· Does a foreign entity/partnership qualify as transparent for Dutch tax purposes? Or not?
· Do the Dutch tax authorities consider a certain intercompany remuneration in line with the arms’ length principle? Or not?
The State Secretary attached 3 attachments with his letter.
The first attachment is the so-called ATR (Advance Tax Ruling) Decree which was issued on August 11, 2004. This Decree provides (formal) conditions that have to be met in order for a taxpayer to be able to obtain an ATR. Attached to this Decree are some general example texts of ATRs.
The second attachment is the so-called APA (Advance Pricing Agreement) Decree which was also issued on August 11, 2004. This Decree provides (formal) conditions that have to be met in order for a taxpayer to be able to obtain an APA. Attached to this Decree are some general example texts of APAs.
The third attachment is an overview of ATR and APA requests filed, granted, denied and withdrawn during the years 2010 through 2014.
Click here to be forwarded to page of the Dutch Ministry of Finance where links to the letter as well as the attachments can be found. (The letter and the attachments are all drafted in the Dutch language)
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