Overhaul of corporation tax rules for tax groups put out for public consultation

The existing tax group-based corporation tax rules are up for replacement, in response to jurisprudence of the European Court of Justice which has already brought about several adjustments in other areas. The Dutch Junior Minister for Finance has launched the initial Internet consultation round concerning the design of the replacement tax group regime, to which end a document has been prepared in which four different approaches are presented, as follows:

• continuation of the existing regime supplemented where necessary with new “fixes”,
• abolition of the tax group regime,
• introduction of a carry-over regime for losses/profits, or
• formation of a cross-border group regime featuring full exemption.

The tax group set-up provides for a cluster of companies made up of a parent company and one or more subsidiaries being taxed as if the constituent entities were a single tax payer. The consultation round, whose deadline has been set at close of business on the 29th of July, offers a digital forum for stakeholders to weigh up four different ways out of the current conundrum. The Junior Minister for Finance intends to submit an outline of the envisaged tax group regime to the Lower House next autumn, with the ultimate aim of presenting draft legislation by 2020.

Dutch version: Start consultatie vervanging fiscale eenheid vennootschapsbelasting