Dutch government provides further guidance on ATAD implementation, tax avoidance measures

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March 2018


The Dutch government has provided additional guidance to Parliament on its proposed measures addressing tax avoidance and the Dutch interpretation of the EU anti-tax avoidance directive (ATAD). The guidance, sent February 23, 2018, is in line with the Dutch government’s previously proposed tax plans for the coming years. 

The Dutch government is aiming to increase the Netherlands’ attractiveness for multinational enterprises (MNEs) doing business in the Netherlands. The government still intends to reduce the general Dutch corporate income tax (CIT) rate to 21% and abolish the current Dividend Withholding Tax Act.

The takeaway

The Dutch government strives to keep the Netherlands attractive for MNEs. The Dutch government gives MNEs more certainty that the Dutch CFC rules are not applicable if certain substance requirements are met at the level of the foreign subsidiary. The government also proposed measures to fight tax avoidance by introducing increased substance requirements and a withholding tax on dividend, interest and royalty payments to low-tax jurisdictions and non-cooperative jurisdictions. The implementation of these rules should be monitored closely by MNEs upon publication of the bill.

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