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Latest News

In this section you will find the latest news on tax subjects we regularly advise on. If you wish to receive additional information on these topics, please feel free to contact us.

The potential impact of a Brexit on Tax

28 Nov. '18

On 14 November 2018 the European Commission and the UK reached an agreement on the Withdrawal Agreement and on an outline of the political declaration on the future EU-UK relationship. This newsitem lists the main consequences.

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This close to disclose?

07 Jun. '18

New mandatory disclosure requirements for intermediaries and relevant taxpayers, aimed at boosting transparency to tackle aggressive cross-border tax planning, will enter into force on 25 June 2018. The arrangements described as “reportable” are very wide-ranging and therefore it cannot be assumed that taxpayers which do not want to be associated with “aggressive tax avoidance” do not have arrangements in place that are disclosable.

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New developments regarding Netherlands substance requirements

09 Apr. '18

This week the Lower House of the Dutch Parliament has acknowledged that these (extended) requirements do not take into account the scale and nature of the (worldwide) activities of enterprises. Hence, the Lower House has resolved a motion requesting the government to take into account the scale and nature of activities in applying the extended substance requirements.

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German Ministry of Finance modifies anti-treaty shopping rules in response of ECJ decision

09 Apr. '18

In our blog of February, 2018 we discussed the recent (December 2017) ECJ decision in Deister Holding and Juhler Holding (Joined Cases C-504/16 and C-613/16). In these cases the ECJ had held that the German “look through approach” in case of insufficient substance as clarified in Sec. 50d para. 3 German Income Tax Act (ITA) was not compatible with the EC Parent-Subsidiary Directive (Sec. 1 para. 2 in conjunction with Sec. 5 para. 1) and EC law (Sec. 49 TFEU). These Joint Cases are interesting for most Netherlands groups operating in Germany that have received dividends from Germany. Typically Netherlands holding companies that administer subsidiaries have difficulty substantiating sufficient substance to comply with Sec. 50d para. 3 ITA. Often these foreign holding companies, as in the case of the Deister Holding and Juhler Holding require by nature limited managerial staff to manage their asset management activities.

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ECOFIN meeting: obligations for intermediaries and amendments to EU blacklist

15 Mar. '18

On March 13, 2018 the Council of the European Union reached an agreement to establish certain reporting obligations for intermediaries, such as tax advisers, accountants and lawyers. The draft directive the Council has adopted is relevant for all tax advisers (including in-house tax specialists) who advice on international clients, and deadlines of potential notification requirements should be monitored carefully. The Council also agreed on amendments to the EU blacklist.

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German Tax Court utilizes third party bank loan to benchmark shareholder loans

08 Mar. '18

The Finance Court of Cologne (Germany) has taken an interesting approach on transfer pricing methodology. The Tax Court decided that an internal (i.e. third party bank loan) Comparable Uncontrolled Price (“CUP”) is preferred as transfer pricing method on analyzing the arm’s length remuneration on an intercompany loan, even though the loans did not appear to be comparable from the outset.

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New US tax reform

19 Feb. '18

On 22 December 2017, the Tax Cuts and Jobs Act was signed into law by President Trump. With it, the Act provides the most comprehensive overhaul of the US tax code in more than 30 years.

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Introduction of a dividend withholding tax exemption

16 Feb. '18

As of 1 January 2018, new legislation eliminates dividend withholding tax on distributions to entities resident in the EU/EEA or in a state with which the Netherlands has concluded a tax treaty that includes a dividend article. The exemption is subject to targeted anti-abuse rules, but should make the Netherlands tax climate more attractive.

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Amended substance requirements

14 Feb. '18

For a number of years, the Netherlands used a minimum list of “substance requirements” to assess whether or not a company could apply for a certificate of residence in the Netherlands. The full list also needed to be satisfied in order to get access to the Dutch tax ruling team. In the Dutch Tax Bill 2018, the list is now further clarified and expanded.

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Fiscal measures in German coalition agreement

07 Feb. '18

On 7 February 2018, the German parties CDU, CSU and the SPD formed a coalition agreement. Although there is nothing fundamentally new within the fiscal paragraphs included in the agreement, the agreement does display a broad vision of Germany’s future tax policy, and more importantly, the EU’s future tax policy.

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The Hague decision on Netherlands non-resident tax

23 Jan. '18

On 12 December 2017, an appeal decision by Court The Hague was published regarding non-resident taxation of a dividend distribution from a Dutch company to a company migrated to Luxembourg. The company migrated to Luxembourg was held by an individual. Where the lower court decided in favor of the taxpayer, the Court The Hague decided the other way around. The Dutch Tax Authorities actively use this case in relevant discussions.

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Transfer of valuable intangibles

12 Dec. '17

Last week we provided a second opinion to an accounting firm in respect of the envisaged transfer of valuable intangibles of one of its clients, a MNE, to a Luxembourg company. The MNE manufactured and distributed products. The value of the products was not determined by the technical features of the products, but rather by the brand name and exposure. The MNE wanted to differentiate itself from its competitors through the development of brand names with great value, by implementing a carefully developed and expensive marketing strategy. The brand names are owned by X BV in The Netherlands. The development, maintenance and execution of a worldwide marketing strategy are the main value drivers of the MNE, performed by 275 employees at X BV’s Netherlands head office. The value of the brand names resulted in a high consumer price for the products. X BV’s head office also provides for central services for the group affiliates (e.g. human resource management, legal, tax). The products are manufactured by affiliates under contract manufacturing arrangements with X BV. They are distributed by affiliates who purchase them from X BV. After having allocated an arm’s length remuneration to the contract manufacturers and distributors the profits derived by X BV are considered to be the remuneration for the intangibles, marketing activities and central services of X BV.

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Adjustments Luxembourg Transfer Pricing Rules

12 Dec. '17

On 27 December 2016, the Luxembourg administration for direct taxes published a Cicular on group financing activities. The Circular more or less clarifies and/or emphasizes that the effective management of Luxembourg group financing companies should take place in Luxembourg and certain risk requirements need to be satisfied.

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Changes to the Netherlands Innovation Box: limitation on IP assets

12 Dec. '17

The Netherlands government promotes engagement in research and development (R&D) activities through a preferential corporate income tax regime (i.e. the innovation box) and specific R&D tax incentives granted to employers with regard to salaries paid to employees who carry on qualifying R&D activities and related capital expenditure (i.e. the WBSO). In the last few months we have seen a number of legislative proposals and thoughts that significantly affect the innovation box. In this respect we have taken the liberty to post a number of blogs to clarify these measures, the envisaged changes and their impact on companies. In this first blog we will clarify the limitations (and to a certain extent even broadened scope on) qualifying IP assets for the innovation box. In subsequent blogs we will elaborate on the profit attribution, the R&D expenditure and the transition / grandfathering provisions.

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Transfer pricing aspects of centralized purchasing

12 Dec. '17

In this blog we will illustrate the application of the arm’s length principle in case of the implementation of a central purchasing function. This type of transfer pricing analysis ultimately reflects the central importance of the functional analysis in order to understand the role played by each of the parties in the creation of synergies, costs savings, or other integration effects. Which transfer pricing method is the most appropriate will depend on a determination of to which parties the cost savings or inefficiencies created by the centralization of the purchasing function should be allocated.

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Changes to the Netherlands Innovation Box: Profit Allocation

12 Dec. '17

The Netherlands government promotes engagement in research and development (R&D) activities through a preferential corporate income tax regime (i.e. the innovation box) and specific R&D tax incentives granted to employers with regard to salaries paid to employees who carry on qualifying R&D activities and related capital expenditures (i.e. the WBSO). In the last few months we have seen a number of legislative proposals and thoughts that significantly affect the innovation box. In this respect we have taken the liberty to post a number of blogs to clarify these measures, the envisaged changes and their impact on companies. The first blog covered the limitation on IP assets. In this second blog we will elaborate on the profit attribution.

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