Changes to the Dutch domestic rules regarding dividend withholding tax and corporate income tax for foreign taxpayers will result in certain advance tax rulings no longer being applicable, beginning 1 January 2018. In situations when taxpayers require certainty, a new ruling request can be filed soon after 1 January 2018, with the ruling having retroactive effect as from 1 January 2018. There is one exception—for existing CV-BV advance tax rulings, a reconfirmation letter can be filed with the Dutch tax authorities before 1 January 2018 to allow for continuous application of the existing CV-BV ruling for the remaining term of the ruling.
On Budget Day in September 2017, the Dutch cabinet announced its intention to amend the Dutch dividend withholding tax law and to make related changes to the Dutch corporate income tax law. The new legislation was approved on 19 December 2017 and was set to be published in the following days. The new provisions will be effective 1 January 2018. Every advance tax ruling that involves these rules will in principle end due to the fact there has been “material change of legislation.” The material-change condition is part of all Dutch tax rulings.
Taxpayers will need to file new ruling requests after 1 January 2018 to obtain certainty under the new legislation.
The Dutch tax authorities have indicated that ruling requests will only be accepted after 1 January 2018, and approved requests can have retroactive application if the ruling requests are made within a "reasonable" time period after 1 January 2018.
For existing CV-BV rulings (not involving cooperatives), the Dutch tax authorities have stated that a simple reconfirmation letter can be filed before 1 January 2018. A CV-BV ruling is based on a treaty application, and not domestic application of the Dutch law. To secure continuous application of CV-BV rulings, the Dutch tax authorities have stated that they will accept reconfirmation letters before 1 January 2018. The filing of a reconfirmation letter would be seen as a mere administrative act to allow for the continued application of a current tax ruling. If the reconfirmation letter is approved, the tax ruling will continue to apply for the remaining term of the ruling.
For more information or for answers about drafting and filing new ruling requests or reconfirmation letters for any existing CV-BV ruling, contact a tax professional with the Netherlands Tax Center of KPMG LLP:
Aroen Rambhadjan | +1 (212) 954 1859 | AroenRambhadjan@kpmg.com
Kees van Meel | +1 (212) 872 6405 | email@example.com
Luc van der Voort | +1 (212) 954 2146 | LucVanderVoort1@kpmg.com
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.