| Although
the Netherlands has a sophisticated tax
system with high tax rates some aspects
of its fiscal system are extremely attractive
and make it the ideal location in which
to base international trading operations.
Attractive fiscal incentives are further
enhanced by a complex network of double
taxation treaties (few of which contain
any anti avoidance provisions) and by the
existence of a procedure of advance tax
rulings whereby the tax authorities who
are autonomous and approachable can at short
notice specify the fiscal consequences of
certain business structures provided that
material financial interests are involved
and the propositions are reasonable.
The
Dutch government announced in 2004 that
it would cut the country's corporate tax
rate to 31.5% in 2006 from 34.5%.
Presenting
the last budget prior to the election on
November 22, 2006, Holland's long-serving
Finance Minister Gerrit Zalm stated that
the government would continue to cut the
rate of corporate income tax, which fell
to 25.5% in 2007 from 29.1%, putting it
below the European Union average. This represents
a 5% cut in corporate tax since 2005.
In
anticipation of confirmation of the Marks
& Spencer ruling on cross-border loss relief
by the European Court of Justice, the government
proposed to allow relief for losses incurred
in other EU Member States. In addition,
participation rules would be relaxed by
eliminating the nonportfolio and "subject
to tax" requirements. For "passive" participations,
a "sufficient" tax rate test (possibly 10%)
would be introduced.
Ruling
in December 2005, the ECJ stated that companies
could offset losses incurred by foreign
subsidiaries as long as there was no "real
possibility" that these could be absorbed
at the local level at the time the claim
was made.
According
to the ruling, M&S could therefore claim
tax relief for losses outside its home market,
with the proviso that loss-making subsidiaries
were unable to claim tax relief in their
country of establishment.
Netherlands
Knowledge Base
- NETHERLANDS
INDIVIDUAL NON-RESIDENT TAXATION
- NETHERLANDS CORPORATE
NON-RESIDENT TAXATION
- NETHERLANDS SPECIAL
EXPATRIATE FISCAL REGIME
- NETHERLANDS DUTCH
HOLDING COMPANIES
- NETHERLANDS INTEREST
CONDUIT COMPANIES
- NETHERLANDS ROYALTY
CONDUIT COMPANIES
- NETHERLANDS ANTILLES
AND ARUBA
- NETHERLANDS THE
FISCAL UNIT
- NETHERLANDS TAXATION
OF FOREIGN BRANCHES
|
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