Short Reads

Transitional rules announced for certain Dutch tax acts in case of no deal Brexit

Transitional rules announced for certain Dutch tax acts in case of no

Transitional rules announced for certain Dutch tax acts in case of no deal Brexit

05.02.2019 NL law

On 4 February 2019, the Dutch State Secretary of Finance sent a letter to the Dutch Parliament announcing transitional rules for Dutch taxes (other than customs legislation) if there will not be a Brexit withdrawal agreement (i.e. a no deal Brexit). The letter includes an outline of the transitional rules.

Further - more detailed - guidance is being prepared and is to be issued at a later stage. According to the letter, the transitional rules would imply that for designated Dutch tax purposes (notably in personal income taxation and in corporate income taxation), the United Kingdom would be deemed to not yet have left the European Union. The transitional rules should in principle apply for a limited period of time.

On 15 January 2019, a majority of the British House of Commons effectively voted against the approval of the withdrawal agreement between the United Kingdom and the European Union. The United Kingdom is scheduled to leave the European Union as of 30 March 2019. Due to the lack of clarity on if, when and how (exactly) the Brexit will take place, the Dutch State Secretary of Finance considers it desirable to introduce a form of transitional rules for taxes, other than customs legislation, in the event of a no-deal Brexit.

Given that Dutch tax legislation in several provisions of law distinguishes tax treatment depending on whether a taxpayer is domiciled or established in an EU Member State or in a third country, a no-deal scenario would trigger a different tax treatment (immediately) from the date of withdrawal. The State Secretary wishes to mitigate such impact, in particular for abrupt changes in current financial years. For example, a corporate income tax fiscal unity of Dutch companies whose shares are held by a so-called top company that is established in the United Kingdom, would dissolve by virtue of law since the top company no longer would be a resident of an EU member state. 

In a separate impact assessment the Dutch tax authorities have acknowledged that EU directives in relation to direct taxes would no longer apply vis-à-vis the United Kingdom after Brexit but further guidance would need to be awaited to see whether transitional rules may apply here as well, as the impact assessment hints at applying these directives for current financial years (starting before Brexit date and ending after it). Furthermore, the Brexit makes businesses, currently based in the United Kingdom, decide to establish themselves in the Netherlands. The tax aspects in relation to the move often are complex for the Dutch tax authorities. The tax authorities therefore have increased their capacity to efficiently deal with this and are open to extra prior consultation with UK businesses.

Once the preparation of the guidance is completed, a draft decree should be sent to Parliament.  

Stibbe contributes Dutch chapter to Chambers Global Practice Guides Corporate Tax 2019


Lastly we are proud to share with you the Dutch chapter of the Chambers Global Practice Guides Corporate Tax 2019, that was written by Michael Molenaars, Jeroen Smits, Reinout de Boer and Rogier van der Struijk. Besides providing you with an outline of Dutch corporate income taxation, the chapter pays attention to the impact of BEPS on the Dutch corporate income tax landscape.

 

Team

Related news

10.12.2019 NL law
David Orobio de Castro, Michael Molenaars and Job van Hooff new board Stibbe in Amsterdam

Inside Stibbe - As of 1 January 2020, David Orobio de Castro, Michael Molenaars and Job van Hooff will form the new board of Stibbe in Amsterdam. David Orobio de Castro has been on the board of Stibbe since 2016 and succeeds Derk Lemstra as managing partner. After a period of six years on the board, Derk will once again fully focus on advising clients in the field of corporate law.

Read more

08.11.2019 BE law
Interview with Wouter Ghijsels on Next Gen lawyers

Articles - Stibbe’s managing partner Wouter Ghijsels shares his insights on the next generation of lawyers and the future of the legal profession at the occasion of the Leaders Meeting Paris where Belgian business leaders, politicians and inspiring people from the cultural and academic world will discuss this year's central theme "The Next Gen".

Read more

05.11.2019 LU law
Stibbe renforce son cabinet au Luxembourg avec l’arrivée de Johan Léonard en qualité d’associé au sein du département de droit fiscal

Inside Stibbe - Luxembourg, 5 novembre 2019 – Stibbe renforce son cabinet luxembourgeois avec le recrutement latéral de Johan Léonard, associé au sein de la pratique de droit fiscal. Son arrivée permettra au cabinet d’augmenter son offre fiscale au Luxembourg afin de mieux répondre à l’évolution des besoins du marché. Johan a rejoint Stibbe le 4 novembre 2019.

Read more

27.09.2019 NL law
Stibbe is attending the IBA's annual conference in Seoul

Conference - The annual conference of the International Bar Association (IBA) is currently taking place in Seoul. There are fourteen partners from Stibbe attending the event. Several of them have speaking slots on a wide range of legal topics and will take part in various panel discussions.

Read more

Our website uses functional cookies for the functioning of the website and analytic cookies that enable us to generate aggregated visitor data. We also use other cookies, such as third party tracking cookies - please indicate whether you agree to the use of these other cookies:

Privacy – en cookieverklaring