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  • Caius Tax Management

Codified Dutch Substance Requirements

The question whether the Netherlands is regarded a tax haven, conduit, or source country may depend on who is answering the question. However, as matter of fact the Netherlands has codified its substance requirements for WHT, CIT (including CFC and substantial interest rules), providing for a set of uniform requirements applicable for domestic resident and foreign companies alike. 

Meeting these codified substance requirements do unfortunately no longer provide a safe harbor, in that for application of the relevant tax the structure is not abusive. Meeting the substance requirements will merely provide a presumption of proof that the arrangement is not abusive. Although, this may be in line with the jurisprudence of the ECJ, pointing to an assessment of substance based on facts and circumstances relevant to the case, it is creating for many taxpayers and their directors a high degree of uncertainty.

This is the second post in a series of posts on recent substance developments.


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