Netherlands: new decrees on ATRs, APAs and substance requirements

By Sirathorn B J Dechsakulthorn and Jian-Cheng Ku

One of the most attractive features of doing business in the Netherlands is the possibility of obtaining an advance tax ruling (ATR) and/or advance pricing agreement (APA) so that foreign companies investing in or through the Netherlands have full certainty on their future tax position in the Netherlands. In June, the Dutch Ministry of Finance published five new decrees on ATRs, APAs and the Dutch substance requirements. These decrees update and replace the previous decrees of 11 August 2004. The new decrees apply for fiscal years starting on and after 1 January 2014.

Below we highlight the main changes with respect to the ATR and APA ruling practice in the Netherlands. In general, the new decrees formalise already existing Dutch ruling practice.

The Dutch tax authorities will only conclude ATRs with intermediate holding companies and top holding companies if either: (i) the minimum substance requirements are met (see under Substance Requirements); or (ii) if the Dutch holding company is part of a group that has operational activities in the Netherlands or has genuine plans to engage in these…

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