The Dutch government published a legislative proposal engaging rules to counter hybrid mismatches into the Dutch corporate income tax act pursuant to the EU Anti-Tax Avoidance Directive as agreed upon in May 2017 (ATAD2).
ATAD2 addresses tax avoidance via hybrid mismatches in affiliated relationships. The hybrid mismatches covered by the primary and secondary rules include:
The proposal is largely similar to the consultation draft of 29 October 2018. The most notable changes are the following:
The proposal will apply to hybrid mismatch arrangements between related parties are covered (generally at least 25% interest (in line with ATAD1 rules), profit entitlement or capital ownership, as well as certain other situations of control. Based on the explanatory notes, the Netherlands will not apply anti-hybrid rules to the extent the income as such is actually subject to tax at the regular tax rate, however only if the taxation is not reduced by deductions and/or underlying income tax credits.
Due to the implementation of this regulation, the Dutch government will withdraw the so-called ‘CV/BV Decree’ that deals with the application of the anti-hybrid entity provision in the tax treaty between the Netherlands and the United States.
Source: Dutch Government
With the fast growth of China’s economy and the continuous improvement of the comprehensive strength of domestic enterprises, as well as the implementation of the “One Belt, One Road” policy, an increasing amount of Chinese enterprises are beginning to expand their global footprint and establish their presence in Europe.
TPA Global has developed a practical roadmap of 6 steps meant to guide CFOs in their Journey of rising above troubles to reach a situation of full control. These steps are presented in a series of short video clips (3-5 minutes):