Emergency repair measures in corporation tax sphere: memorandum of amendment

One of the memorandums of amendment having been prompted by the reconsideration of the dividend tax abolition addresses the emergency repair measure for tax entities in a corporation tax sphere. The essence of the relevant provisional legislation is that the interest relief reduction aimed against profit shifting should likewise come to apply within the fiscal entity. Particular elements of the participation exemption, of the interest relief reduction for excessive participation interest and of the set-off of losses in the context of the participating interest changing are likewise to come to apply to fiscal entities. The upshot of this in a corporation tax sphere is that fiscal entities will henceforth be treated similarly to cross-border groups of companies.

It has been decided in spite of previous announcements and notwithstanding the original text of the Bill that the retroactive effect of the various measures should remain confined to the first of January 2018 (where the original draft legislation mentioned the 25th of October 2017, this being the original announcement date). This adjustment has been made in order to stop tax payers having to file their tax return for 2017 before the legislative process has been properly completed.

Relevant articles:

• Withholding Tax Act 2020: second memorandum of amendment
• Tax Plan for 2019: second memorandum of amendment

Dutch version: Nota van wijziging spoedreparatie vennootschapsbelasting