On December 11, 2014 the Court of Appeals Amsterdam ("the Court") ruled in three cases that Dutch legislation on the fiscal unity for corporate income tax purposes is contrary to the European freedom of establishment. These Court judgments follow the decision rendered by the Court of Justice of the European Union on June 12, 2014 in response to the request for a preliminary ruling that the Court had submitted to it in these proceedings, one of which was instigated by Meijburg & Co on behalf of one of its clients.
On December 17, 2014 the Deputy Minister of Finance announced that the three judgments would not be appealed before the Supreme Court. The cases concerned requests for the formation of a fiscal unity between sister companies of a European parent company and between a domestic parent company and a domestic sub-subsidiary held through an intermediate holding company resident in another EU Member State.
Modification of fiscal unity regime
The Deputy Minister of Finance also announced his intention to modify the fiscal unity regime for corporate income tax purposes in order to bring it into line with European law. To this end, a bill will be submitted to the Dutch parliament in the first half of 2015.
Policy statement for requests
Requests that have already been submitted to the Dutch Tax and Customs Administration will be dealt with in accordance with a policy statement to be published shortly. In this statement, the Deputy Minister of Finance will grant approval to the Dutch Tax and Customs Administration to accede to such requests in anticipation of legislation. This policy statement will also indicate, in respect of the abovementioned ‘foreign situations’, under which circumstances and subject to which requirements a fiscal unity between the companies resident in the Netherlands will be possible and what the consequences of such a fiscal unity are. In both this policy statement and the forthcoming legislation, the conditions and effect of the existing fiscal unity regime will be adhered to as much as possible. The expansion of the fiscal unity regime will be limited to the foreign situations in relation to other Member States of the European Union, Norway, Liechtenstein and Iceland.
Commentary by Meijburg & Co
With this announcement a long procedure has been brought to a successful conclusion. For our client, this all started with a request made in 2007 to form a fiscal unity between group companies resident in the Netherlands. In such cases it remains crucial that timely action is taken in order for rights to be preserved. A request for a fiscal unity can be made up to three months after the desired commencement date.
If you would like more information on this issue, our tax advisors will naturally be happy to be of assistance.