Global

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  • Service: Tax, International Corporate Tax, Mergers & Acquisitions, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 7/23/2012

The Netherlands - Thin capitalization, participation interest, active financing 

July 23:  With final passage of legislation by both houses of Parliament, provisions in the bill for implementing the Tax Measures Budget Agreement 2013 generally will be effective 1 January 2013.  Areas addressed in the legislation concern:
  • Thin capitalization rules and the deduction limit for a participation interest
  • Expansion of a group’s operating activities
  • The use of a legal option facility by an affiliated entity or certain hybrid financing structures whereby interest is deducted twice (under the “double dip” situation)
  • Active financing activities
  • Reorganizations

The Lower House passed the bill on 26 June 2012.


The Upper House passed the bill on 10 July 2012, and during the brief parliamentary debate, the Upper House removed some uncertainties concerning the new corporate income tax interest deduction limitation measure in respect of participations.


The Deputy Minister of Finance provided additional explanations on the legislative provisions.


Read a July 2012 report prepared by the KPMG member firm in the Netherlands: Upper House passes bill on tax measures Budget Agreement − latest developments on participation interest −




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