On November 11, 2015 in the Dutch Staatscourant a Decree from the Dutch State Secretary for Finance containing an approval regarding an adjustment period for Advance Tax Rulings (ATRs) that will expire as a consequence of the entry into force of the Wet implementatie wijzigingen Moeder-dochterrichtlijn 2015 (Law implementing the changes in the Parent Subsidiary Directive 2015) was published.
The law proposal Wet implementatie wijzigingen Moeder-dochterrichtlijn 2015 contains a.o. amendments to Article 17, Paragraph 3, Sub b of the Dutch corporate income tax Act (Subject of taxation for foreign taxpayers) and to Article 1, Paragraph 7 of the Dutch dividend withholding tax Act (Cooperaties). These amendments are made in order to revise these articles in such way that they will be in conformity with the anti-abuse clause of the Parent Subsidiary Directive. As a consequence of these amendments, in certain situations it will be of importance that the substance requirements as meant in Article 8a of the ATR-Decree are met by the foreign entity owning an “aanmerkelijk belang” in an entity residing in the Netherlands, respectively the direct member of a cooperatie.
Assuming that the Dutch parliament approves the law proposal, the amendments will enter into force on January 1, 2016. The law proposal does not contain any transitional measures. ATRs contain a clause arranging that such ATR will expire in case of a relevant law change. Therefore as per January 1, 2016 ATRs concluded with respect to Article 17, Paragraph 3, Sub b of the Dutch corporate income tax Act and Article 1, Paragraph 7 of the Dutch dividend withholding tax Act will expire in case in the situations as described above the necessary substance requirements are not met. Because of efficiency reasons the Secretary for Finance issued the following approval.
According to the Decree under certain conditions the State Secretary approves that the conditional clause included in the ATR regarding the immediate expiration of the ATR in case of a relevant change in law, of an already concluded ATR, will be suspended until April 1, 2016 with respect to Article 17, Paragraph 3, Sub b of the Dutch corporate income tax Act and Article 1, Paragraph 7 of the Dutch dividend withholding tax Act.
For the aforementioned approval to apply, the following conditions have to be met:
a. Interested parties contact the APA/ATR team of the Belastingdienst/Grote ondernemingen (kantoor Rotterdam) in writing before January 1, 2016;
b. When doing so, interested parties clearly state their intention to meet the necessary substance requirements before April 1, 2016;
c. Interested parties also declare that they acknowledge that the ATR will expire as per January 1, 2016 if they do not meet the necessary substance requirements before April 1, 2016;
d. Before May 1, 2016 interested parties have to adequately inform the APA/ATR team of the Belastingdienst/Grote ondernemingen (kantoor Rotterdam) whether the necessary substance requirements have been met.
The State Secretary furthermore notes, that since no transitional measures exist, dividend distributions, income from the alienation of the ‘aanmerkelijk belang’ or the income from the participation in a cooperatie (made, received or generated) in the period between January 1, 2016 and the date as of which the necessary substance requirements are met, will always be taxed (with taking into account the applicable provisions of a DTA).
Click here to be forwarded to the Decree as published on the website of the Dutch Staatscoourant, which will open in a new window. (The Decree is unfortunately only available in the Dutch language)
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