Partner Jurjen Bevers and senior associate Wesley Boldewijn from Dentons Boekel's Tax practice in Amsterdam co-authored an article on the participation exemption, which was published in Dutch tax trade journal Weekblad voor Fiscaal Recht (WFR).

On 6 June 2018, the Dutch Ministry for Finance published a legislative proposal to amend the Dutch fiscal unity regime. If the legislative proposal enters into force, the fiscal unity should be disregarded for the application of certain tax provisions in the Corporate Income Tax Act 1969 and Dividend Withholding Tax Act 1965, such as interest deduction limitation, the participation exemption and the offset of losses. These provisions would then be applied as if the entities within the fiscal unity were taxed on a stand-alone basis.

For certain taxpayers this potentially raises issues, especially when a specific profit regime applies to the fiscal unity that couldn't be applied on a stand-alone level, for example in case of the Dutch tonnage tax regime or the innovation box regime.

In this article Jurjen Bevers and Wesley Boldewijn explain the potential problems for shipping companies who often make use of the Dutch fiscal unity regime in combination with the tonnage tax regime. The authors urge the Dutch parliament to repair these unintended effects of the legislative proposal and also propose relatively simple alternatives to amend the law without impacting the shipping industry as this was never intended.

The full article (in Dutch) can be found here but is only accessible to WFR subscribers.

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