Dutch 2012 Tax Bill adopted


On 17 November, the Second Chamber of Dutch Parliament adopted the 2012 Tax Bill. The Tax Bill contains the following elements that are of particular relevance to foreign investors and other parties involved in M&A and other investments activities in the Netherlands:

The deductibility of interest on acquisition debt, including debt owed to third parties, attracted to acquire a Dutch target company that will be included in a consolidated tax group (fiscal unity) with a Dutch holding company without any taxable activities, will be restricted if and to the extent: (i) the acquisition-debt-to-purchase-price ratio exceeds the 'acceptable' ratio, which is 60% in the year of consolidation, reduced by 5%-points annually over the course of 7 years, down to 25% in year 8; and (ii) the annual amount of interest exceeds EUR 1 M.

The adopted legislative proposal deviates from the initial legislative proposal, which qualified interest as excessive if and to the extent that the fiscal unity's overall debt-to-equity ratio exceeded 2:1. The adopted restriction primarily affects domestic or foreign private equity funds and foreign corporates that acquire Dutch companies.

Dutch cooperatives will be subject to Dutch dividend withholding tax in...

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