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Netherlands: Final policy statement, international tax rulings

Netherlands: Policy statement international tax rulings

The Deputy Minister of Finance in late June 2019 published a policy statement elaborating on the revised ruling policy for “rulings with an international character.”


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The policy statement replaces three previous ruling policy statements (dated June 2014) and is effective 1 July 2019. The revised policy statement is aimed at further safeguarding the quality of the ruling practice for businesses with activities of substance.

  • There will be more stringent requirements for issuing rulings.
  • The rules on the issuing of these rulings will also be more transparent.

The main features of the revision of the ruling practice were previously provided in a draft the policy statement. Read TaxNewsFlash

Summary of new procedures for international tax rulings

The final policy statement is substantially similar to the draft policy statement. In general, the procedure under the revised policy statement is as follows:

  • All international rulings applied for as of  1 July 2019 or not yet issued as of that date, will be sent to one central team for assessment (the team is new International Tax Certainty Board (College Internationale Fiscale Zekerheid—IFZ)).
  • A request for preliminary consultation about an international ruling will, however, first have to be sent to the competent tax inspector. In the case of certain issues, the tax inspector will engage the new IFZ Team (Behandelteam IFZ) which will then hold the preliminary consultation (together with the tax inspector). In all cases, the ruling will subsequently be presented to the IFZ Board.
  • In situations involving prospective foreign investors, a request for preliminary consultation must be addressed to the International Investors Desk (Aanspreekpunt potentiële buitenlandse investeerders—APBI).
  • A request to conclude a bilateral or multilateral advance pricing agreement (APA) must be addressed to the Directorate of International Affairs and Consumer Taxes (Directie Internationale Zaken en Verbruiksbelastingen—IZV) of the Ministry of Finance.
  • It will, in principle, continue to be possible to have a pre-filing meeting with the Dutch tax authorities preceding a ruling request.
  • With regard to the APA request, small enterprises can receive help from the Dutch tax authorities in providing comparables for independent market parties. 
  • An anonymous summary of every new international ruling will be published.
  • A summary of all cases when a ruling was not issued will also be published, including the reason why.
  • The annual report of the Dutch tax authorities will in the future cover all international rulings and not only APAs and advance tax rulings. 
  • In order to obtain advance certainty, as of 1 July 2019, the list of substance requirements will be replaced by a requirement of an economic nexus with the Netherlands—the company submitting the request must be a member of a group that carries on commercial operating activities in the Netherlands, and commercial operating activities must be performed for the account and risk of that company for which at the group level there is sufficient relevant personnel in the Netherlands.
  • Besides the cases that do not comply with the requirement of a Dutch economic nexus, advance certainty will also not be given in cases when: (1) the sole or decisive reason for performing the transactions is to save Dutch and/or foreign tax (motive); and/or (2) the requested advance certainty relates to transactions with entities established in countries appearing on the Dutch blacklist (low-taxed states and non-cooperative jurisdictions).
  • Furthermore, all international rulings will, in principle, have a maximum term of five years. Only in exceptional cases (for example, in the case of long-term contracts) can this be extended to 10 years. According to the policy statement, in that situation, an evaluation will have to take place mid-term.
  • In all cases, an international ruling will be laid down in a settlement agreement (vaststellingsovereenkomst—VSO).

KPMG observation

The new policy statement measures mean in any situation that taxpayers/groups that only establish themselves in the Netherlands for tax reasons and have no further economic nexus with the Netherlands will no longer obtain a ruling from the Dutch tax authorities. The “economic nexus” concept most likely means that the threshold for obtaining advance certainty will in all cases be higher than was the case based on the list of substance requirements. The Deputy Minister previously confirmed that, given that the law will not change as a result of the new policy, the fact that rulings will no longer be concluded for certain arrangements does not mean that these arrangements will disappear. Rulings issued before 1 July 2019 do not fall under the new policy. 

Read a July 2019 report prepared by the KPMG member firm in the Netherlands

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