Further to the several tax proposals released by the Dutch government on Budget Day last September (the 'Proposals' – see also our Tax Alerts of 20 September 2018 and 16 October 2018), on 15 November 2018 the Lower House of Parliament has adopted the 2019 Tax Plan and the proposed implementation of the Anti-tax Avoidance Directive ('ATAD 1') per 1 January 2019. In this Tax Alert we will provide you with a short update in respect of the Proposals.
1. Implementation of ATAD 1
The adopted Proposal, implementing ATAD 1, includes among others a CFC (Controlled Foreign Company) regime.
Under the proposed CFC-regime, a controlled company (in short) is defined as a company in which the tax payer has an interest of more than 50%, provided that the company is a tax resident in a 'low-tax jurisdiction' or a state included on the EU list of non-cooperative jurisdictions (unless the company is taxed as a resident of another state). Under the Proposal, a jurisdiction was considered 'low taxed' if it does not levy a profit tax or levies a profit tax lower than 7% (the statutory rate should be at least 7%). Under the adopted Proposal, this 7%-percentage has been amended to 9%.
2. Way forward
The adopted Proposals will now be send to the Senate. Contrary to the Lower House of Parliament, the Senate may only approve or reject bills in full (and cannot make any amendments). The Proposals are scheduled to be brought to a vote in the Senate for 18 December 2018.