Within the Netherlands, the OECD BEPS project generally and the EU’s follow-up initiatives specifically continue to capture public, media and parliamentary attention. With the spotlight on the taxation of multinationals, companies are increasingly weighing risks versus opportunities, which includes weighing the potential reputational damage related to international tax planning.
The Dutch government has approached the European negotiations on international tax reform proactively. During the Dutch Presidency of the EU Council, the government succeeded in having the EU member states adopt the ATA Directive.
The new ATA Directive, presented in January 2016, includes several elements of the OECD BEPS recommendations, including new limitations on interest deductions and a GAAR, along with new rules on exit taxation, CFCs and hybrid mismatches involving EU countries. EU member states have until 31 December 2018 to implement the provisions of the ATA Directive in their national legislation. The new national rules will apply as of 1 January 2019.
The Dutch EU Presidency and EU Council also asked the EC to put forward a (legislative) proposal on hybrid mismatches involving third countries by October 2016. This formal request is integral to the achieved political agreement and aims to satisfy those member states that had called for the inclusion of measures against third-country mismatches in the ATA Directive itself.
Finally, the Dutch EU Presidency, EU Council and the EC agreed to closely monitor and engage with the OECD on implementingthe BEPS recommendations and maintaining a level playing field internationally.
Debates in the Dutch Parliament and the press are focused largely on tax treaty policy relating to developing countries and on supporting capacity building within their tax administrations. As a result of this debate, the Netherlands approached 23 of its developing country treaty partners to explore amendments to existing treaties in order to include enhanced anti-abuse provisions. Negotiations with six of these countries have been concluded to date.
The Dutch government is actively participating in tax transparency discussions in both the EU and the OECD and is keen to retain the country’s reputation for business friendliness while ensuring all countries have equal opportunities to compete. In July 2015, the Netherlands signed an agreement with Germany for the spontaneous exchange of information on advance tax rulings and unilateral APAs. This agreement was followed by the EU’s adoption of a proposal on the automatic exchange of rulings between EU member states in October 2015. Dutch legislation implementing this amendment to the EU DAC 3 is expected in the course of 2016, taking effect 1 January 2017.
The Dutch government favors multilateral rules that apply equally to all countries and supports the OECD BEPS recommendationson CbyC reporting to tax authorities. As of 1 January 2016, a new chapter was added to the Dutch Corporate Income Tax Act 1969, entitled ‘Additional Transfer Pricing Documentation Requirements’, which covers CbyC reporting and transfer pricing documentation. The obligation to file a CbyC report applies to internationally operating enterprises with activitiesin the Netherlands and consolidated group turnover of at least EUR750 million.
The Dutch government is committed to implementing the modified nexus approach set out in the OECD BEPSAction 5 recommendation relating to patent regimes designed to encourage research and development. In 2015, the EU also endorsed this approach. Following a public consultation, draft legislation will be submitted to Dutch Parliament in September 2016.