Netherlands: fiscal agenda, impact on financing of participations

In the Netherlands the fiscal agenda indicates to introduce (again) a restriction for Dutch holding companies to tax deduct interest paid on loans used to finance or acquire participations. A threshold of € 500.000 might be applicable for small acquisitions. Goodwill paid on shares currently triggers Dutch thincap rules in case you want to form a fiscal unity. It seems they want to change this by counting goodwill paid on shares as equity for the thincap rules. Mid June the Dutch State Secretary of Finance will publish a report on loans used to finance/acquire participations. This report will be used to propose new legislation on this subject.

Importance to practice?

It seems a lot of chances are coming in the Netherlands for the participation exemption, fiscal unity and thincap rules. Hopefully we see the real proposals soon so we know what we need to do.

Source (translated with Google): Fiscale Agenda AFP/2011/248 U