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Netherlands: “Emergency repair of fiscal unity” legislation; corporate tax update

Netherlands: “Emergency repair of fiscal unity”

The Upper House on 23 April 2019 passed a bill that requires certain corporate income tax and dividend withholding tax measures must be applied as if there is no fiscal unity.


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The “Fiscal Unity Emergency Repair Act” (Wet spoedreparatie fiscale eenheid) was included as part of the emergency repair measures.

Most aspects of the legislation would be effective retroactively from 1 January 2018. Because of the retroactive effective date, taxpayers with a financial year corresponding to the calendar year would, in principle, be confronted with the emergency repair provisions for the 2018 financial year. Taxpayers with a “split” financial year would need to apply a “cut.” 

KPMG observation

Given the retroactive effective date was approved by the Upper House, taxpayers would need to consider the emergency repair measures for their 2018 corporate income tax returns when their financial year corresponds to the calendar year. Also, the emergency repair measures could have consequences for these taxpayers’ tax position in their financial statements.

The government has indicated that it intends to introduce a group regime soon as a follow-up to the emergency repair measures (as indicated in February 2019 meeting organized by the Ministry of Finance with representatives of the business sector, interest groups, and academics). The new group regime was not explicitly addressed during the parliamentary debates in the Upper House, but it is expected that an options document could be presented to the Lower House before the summer recess. At that time, interested parties would be allowed to give their initial responses, to be followed by in-depth discussions and a framework letter outlining the results.

Read an April 2019 report prepared by the KPMG member firm in the Netherlands

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