Update on Dutch entity classification and anti-base-erosion rules
In this issue of Tax Notes International, Ashley Peeters and Michael Molenaars provide a detailed analysis of recent tax developments in Dutch regulations concerning entity classification and anti-base-erosion rules.
This article discusses an EU ruling on the Dutch anti-base-erosion rules and a new decree on the classification of foreign entities. The anti-base-erosion rules limit interest deductions on loans to affiliated companies unless business motives can be demonstrated. The Court of Justice emphasizes that the economic rationale and the reason for taking out the loan must also be considered. The decree, effective from 1 January 2025, introduces new classification rules, but uncertainty remains, particularly due to the precedence of the FGR classification, which can lead to hybrid mismatches.
Read the full article here.
Authors: Ashley Peeters and Michael Molenaars
Source: Tax Notes International, volume 116, number 12
Publication Date: 23 December 2024
