Netherlands Corporate Tax Guide

Amsterdam GMT +1

Ernst & Young Belastingadviseurs LLP +31 (88) 407-1000

Mail address: Fax: +31 (88) 407-1005

P.O. Box 7883

1008 AB Amsterdam Netherlands

Street address: Antonio Vivaldistraat 150

1083 HP Amsterdam Netherlands (Legal Services)

HVG Law LLP +31 (88) 407-1000

Mail address: Fax: +31 (88) 407-1005 P.O. Box 7925

1008 AC Amsterdam Netherlands

Street address: Antonio Vivaldistraat 150 1083 HP Amsterdam Netherlands

Principal Tax Contact

 Danny Oosterhoff, Tax +31 (88) 407-1007 and Law Leader Mobile: +31 (6) 21-25-27-54 Email: danny.oosterhoff@nl.ey.com

International Tax and Transaction Services – International Corporate Tax Advisory

Simone Admiraal

+31 (88) 407-1242

Mobile: +31 (6) 29-08-31-83 Email: simone.admiraal@nl.ey.com Martijn Munniksma +31 (88) 407-1597

Mobile: +31 (6) 29-08-37-31 Email: martijn.munniksma@nl.ey.com Erwin Sieders +31 (88) 407-1468 Mobile: +31 (6) 29-08-43-65 Email: erwin.sieders@nl.ey.com

 Dirk Stalenhoef, +31 (88) 407-1977 International Tax and Transaction Mobile: +31 (6) 21-25-13-37 Services Leader Email: dirk.stalenhoef@nl.ey.com Eric Westerburgen +31 (88) 407-2310 Mobile: +31 (6) 52-46-59-68 Email: eric.westerburgen@nl.ey.com

International Tax and Transaction Services – Tax Desks Abroad

Noor Blauw

Mobile: +44 7385-344-888 (resident in London) Email: noor.blauw@uk.ey.com

Sebastiaan Boers +1 (312) 879-3682 (resident in Chicago) Mobile: +1 (408) 904-9678 Email: sebastiaan.boers1@ey.com

Job Grondhout +1 (415) 984-7684 (resident in San Francisco) Mobile: +1 (650) 770-4117 Email: job.grondhout@ey.com

Daan Hoogwegt

+1 (312) 879-3698 (resident in Chicago)

Mobile: +1 (312) 409-1685 Email: daan.hoogwegt1@ey.com

Laura Katsma +1 (415) 894-8923 (resident in San Francisco) Mobile: +1 (628) 502-3977 Email: laura.katsma2@ey.com

Celeste Krens +44 (20) 7197-0992 (resident in London) Email: celeste.johanna.krens@uk.ey.com

Özlem Kiliç +1 (212) 360-9005 (resident in New York) Mobile: +1 (424) 877-5558 Email: oezlem.kilic1@ey.com

Martijn Mulder

+1 (212) 773-4581 (resident in New York)

Mobile: +1 (646) 280-0350 Email: martijn.mulder2@ey.com

Rodin Prinsen +1 (212) 773-0018 (resident in New York) Mobile: +1 (516) 920-7747 Email: rodin.prinsen1@ey.com

Bas Sijmons +852 2846-9704 (resident in Hong Kong) Email: bas.sijmons1@hk.ey.com  Dirk-Jan (DJ) Sloof +1 (212) 773-1903 (resident in New York) Mobile: +1 (917) 834-5748 Email: dirkjan.sloof@ey.com

Max ‘t Hart +1 (212) 466-9161 (resident in New York) Mobile: +1 (646) 719-5239 Email: max.t.hart1@ey.com

International Tax and Transaction Services – Operating Model Effectiveness

Yarikh de Jong

+1 (415) 984-7144 (resident in San Francisco) Email: yarikh.de.jongh2@ey.com Sebastiaan Kuijper

+31 (88) 407-2271 Mobile: +31 (6) 29-08-39-05 Email: sebastiaan.kuijper@nl.ey.com

Kelly Stals +1 (212) 773-3000 (resident in New York) Mobile: +1 (646) 463-1758 Email: kelly.stals1@ey.com

Bas van Stigt

+1 (212) 773-7682 (resident in New York) Mobile: +1 (347) 403-1422 Email: bas.van.stigt1@ey.com

International Tax and Transaction Services – Transfer Pricing

Tim Meijer

+31 (88) 407-2117

Mobile: +31 (6) 21-25-13-44 Email: tim.meijer@nl.ey.com

 Danny Oosterhoff, Tax +31 (88) 407-1007 and Law Leader Mobile: +31 (6) 21-25-27-54 Email: danny.oosterhoff@nl.ey.com

International Tax and Transaction Services – International Capital Markets

Silvain Niekel

+31 (88) 407-1675 Mobile: +31 (6) 29-08-40-76 Email: silvain.niekel@nl.ey.com

International Tax and Transaction Services – Transaction Tax Advisory

Sjoerd Hensen +31 (88) 407-8500

Mobile: +31 (6) 21-25-10-86 Email: sjoerd.hensen@nl.ey.com

Anne Mieke Holland

+31 (88) 407-1599

Mobile: +31 (6) 29-08-43-38 Email: anne.mieke.holland@nl.ey.com

Michiel van de Velde

Business Tax Advisory

+31 (88) 407-0822

Mobile: +31 (6) 21-25-27-94 Email: michiel.van.de.velde@nl.ey.com

Dick Hoogenberg, +31 (88) 407-1419

Japanese Business Group

Marieke Kopinsky

Ratna Kroneman

Mobile: +31 (6) 21-25-26-90 Email: dick.hoogenberg@nl.ey.com

+31 (88) 407-1266

Mobile: +31 (6) 29-08-34-60 Email: marieke.kopinsky@nl.ey.com

+31 (88) 407-1040

Mobile: +31 (6) 21-25-15-28 Email: ratna.kroneman@nl.ey.com

Bas Leenders +31 (88) 407-0633

Mobile: +31 (6) 21-25-26-95 Email: bas.leenders@nl.ey.com

Yee Man Tang +31 (88) 407-1415

Mobile: +31 (6) 24-85-78-15 Email: yee.man.tang@nl.ey.com

Chiel Smit, +31 (88) 407-1135

Business Tax Services Leader

Mobile: +31 (6) 29-08-38-71 Email: chiel.smit@nl.ey.com

Mark van der Geld +31 (88) 407-1098

Mobile: +31 (6) 21-25-18-06 Email: mark.van.der.geld@nl.ey.com

Coen Walschot

Global Compliance and Reporting

Ingrid Allemekinders

+31 (88) 407-1763

Mobile: +31 (6) 29-08-32-42 Email: coen.walschot@nl.ey.com

+31 (88) 407-3010

Mobile: +31 (6) 21-25-24-15 Email: ingrid.allemekinders@nl.ey.com

Ryan van Zalen, +31 (88) 407-1414 TARAS Mobile: +31 (6) 29-08-46-26 Email: ryan.van.zalen@nl.ey.com

Indirect Tax

Bas Breimer, +31 (88) 407-8773 Financial Services Mobile: +31 (6) 29-08-39-37 Email: bas.breimer@nl.ey.com

Gijsbert Bulk +31 (88) 407-1175

Mobile: +31 (6) 29-08-32-49 Email: gijsbert.bulk@nl.ey.com

Folkert Gaarlandt +31 (88) 407-0559 Mobile: +31 (6) 29-08-34-53 Email: folkert.gaarlandt@nl.ey.com

Jeroen Scholten, +31 (88) 407-1009 Global Trade

Mobile: +31 (6) 21-25-23-83 Email: jeroen.scholten@nl.ey.com Walter de Wit +31 (88) 407-1390

Mobile: +31 (6) 21-25-18-81 Email: walter.de.wit@nl.ey.com

Legal Services

Rutger Lambriex

Jan Padberg

+31 (88) 407-0425

Mobile: +31 (6) 21-25-15-74 Email: rutger.lambriex@hvglaw.nl

+31 (88) 407-0429

Mobile: +31 (6) 29-08-33-39 Email: jan.padberg@nl.ey.com Martijn Udo de Haes +1 (212) 773-5178 (resident in New York) Mobile: +1 (347) 366-0922 Email: martijn.udodehaes@dp.ey.com

Sandra van Loon Vercauteren

+31 (88) 407-0423

Mobile: +31 (6) 21-25-21-45 Email: sandra.van.loon@hvglaw.nl

Eindhoven GMT +1

Ernst & Young Belastingadviseurs LLP +31 (88) 407-1000 Mail address: Fax: +31 (88) 407-4803 P.O. Box 455 5600 AL Eindhoven Netherlands

Street address: Prof. Dr. Dorgelolaan 12 5613 AM Eindhoven Netherlands

International Tax and Transaction Services – International Corporate Tax Advisory

Tom Philibert

+31 (88) 407-8504

Mobile: +31 (6) 29-08-45-48 Email: tom.philibert@nl.ey.com

International Tax and Transaction Services – Transfer Pricing

Jeroen Geevers

Business Tax Advisory

Maarten Kormelink

+31 (88) 407 8532 Mobile: +31 (6) 29-08-44-85 Email: jeroen.geevers@nl.ey.com

+31 (88) 407-3657 Mobile: +31 (6) 29-08-44-99 Email: maarten.kormelink@nl.ey.com

Ruud Stox +31 (88) 407-4560 Mobile: +31 (6) 29-08-35-05 Email: ruud.stox@nl.ey.com

Indirect Tax

Timo Bootsman

Legal Services

Susan ten Haaf

+31 (88) 407-4876 Mobile: +31 (6) 29-08-47-39 Email: timo.bootsman@nl.ey.com

+31 (88) 407-4515 Mobile: +31 (6) 55-44-21-91 Email: susan.ten.haaf@hvglaw.nl

The Hague GMT +1

Ernst & Young Belastingadviseurs LLP +31 (88) 407-1000 Mail address: Fax: +31 (88) 407-4187 P.O. Box 90636 2509 LP The Hague Netherlands

Street address: Wassenaarseweg 80 2596 CZ The Hague Netherlands Business Tax Advisory

Linda Herms

Louis Leijsen

+31 (88) 407-8623 Mobile: +31 (6) 29-08-36-72 Email: linda.herms@nl.ey.com

+31 (88) 407-1812 Mobile: +31 (6) 21-25-23-24 Email: louis.leijsen@nl.ey.com

Global Compliance and Reporting

Marc Stiebing

Rotterdam

+31 (88) 407-1795

Mobile: +31 (6) 29-08-31-95 Email: marc.stiebing@nl.ey.com

Ernst & Young Belastingadviseurs LLP +31 (88) 407-1000

Mail address: Fax: +31 (88) 407-1005 P.O. Box 2295 3000 CG Rotterdam Netherlands

Street address: Boompjes 258 3011 XZ Rotterdam Netherlands

International Tax and Transaction Services – International Corporate Tax Advisory

Reinout Kok

Cyrille Prevaes

+31 (88) 407-8505

Mobile: +31 (6) 21-25-18-61 Email: reinout.kok@nl.ey.com

+31 (88) 407-8597

Mobile: +31 (6) 21-25-11-79 Email: cyrille.prevaes@nl.ey.com

Frank Schoon +31 (88) 407-8676 Mobile: +31 (6) 21-25-13-03 Email: frank.schoon@nl.ey.com

Michiel Swets

+31 (88) 407-8517 Mobile: +31 (6) 21-25-19-89 Email: michiel.swets@nl.ey.com

Willem van Beekhoff +31 (88) 407-8519

Mobile: +31 (6) 21-25-27-86 Email: willem.van.beekhoff@nl.ey.com

International Tax and Transaction Services – Transfer Pricing

Bo Wingerter

+31 (88) 407-1442

Mobile: +31 (6) 29-08-46-71 Email: bo.wingerter@nl.ey.com

International Tax and Transaction Services – Transaction Tax Advisory

Hans Grimbergen

+31 (88) 407-8498

Mobile: +31 (6) 21-25-16-23 Email: hans.grimbergen@nl.ey.com

Robert Kool + 31 (88) 407-8911 Mobile: + 31 (6) 29-08-34-74 Email: robert.kool@nl.ey.com

Business Tax Advisory

Roxana Bos-Schepers

Theodoor Huiskes

Mobile: +31 (6) 29-08-33-17 Email: roxana.bos@nl.ey.com

+31 (88) 407-8481

Mobile: +31 (6) 21-25-19-75 Email: theodoor.huiskes@nl.ey.com

Ben Kiekebeld +31 (88) 407-8457

Mobile: +31 (6) 21-25-12-64 Email: ben.kiekebeld@nl.ey.com

Janco van Dam +31 (88) 407-1238 Mobile: +31 (6) 55-44-23-31 Email: janco.van.dam@nl.ey.com

Willem Jan Vermeer +31 (88) 407-8458

Mobile: +31 (6) 29-08-34-34 Email: willem.jan.vermeer@nl.ey.com

Global Compliance and Reporting

Jeroen Jansen

+31 (88) 407-9331

Mobile: +31 (6) 53-79-84-35 Email: jeroen.jansen@nl.ey.com

Ed Capel, +31 (88) 407-8477

TARAS

Indirect Tax

Caspar Jansen

Daniel Kroesen

Petra Pleunis

Remco van der Zwan

Legal Services

Sijmen de Lange

Mobile: +31 (6) 21-25-23-75 Email: ed.capel@nl.ey.com

+31 (88) 407-1441

Mobile: +31 (6) 29-08-48-82 Email: caspar.jansen@nl.ey.com

+31 (88) 407-8361

Mobile: +31 (6) 21-25-21-54 Email: daniel.kroesen@nl.ey.com

+31 (88) 407-3797

Mobile: +31 (6) 29-08-30-72 Email: petra.pleunis@nl.ey.com

+31 (88) 407-8370 Mobile: +31 (6) 29-08-45-83 Email: remco.van.der.zwan@nl.ey.com

+31 (88) 407-0228 Mobile: +31 (6) 29-08-37-50 Email: sijmen.de.lange@hvglaw.nl

Bart Wolters +31 (88) 407-0204 Mobile: +31 (6) 29-08-40-35 Email: bart.wolters@hvglaw.nl

Frank Zandee +31 (88) 407-0201 Mobile: +31 (6) 29-08-33-26 Email: frank.zandee@hvglaw.nl

Merel Zwankhuizen +31 (88) 407-0250 Mobile: +31 (6) 21-25-24-28 Email: merel.zwankhuizen@hvglaw.nl

A. At a glance

Corporate Income Tax Rate (%) 25.8 (a)

Capital Gains Tax Rate (%) 25.8 (a) Branch Tax Rate (%) 25.8 (a)

Withholding Tax (%)

Dividends 15 (b)

Interest 0/25.8 (c)

Royalties from Patents, Know-how, etc. 0/25.8 (c) Branch Remittance Tax 0

Net Operating Losses (Years)

Carryback

Carryforward

(d)

(a) A tax rate of 15% applies to the first EUR395,000 of taxable income. For further details, see Tax rates in Section B. An effective tax rate of 9% is avail able for qualifying income related to certain intellectual property (Innovation Box). For details regarding the Innovation Box, see Innovation Box in Section B.

(b) This rate may be reduced to 0% if the recipient is a parent company estab lished in a European Union (EU) member state, European Economic Area (EEA) state or a country that has concluded a tax treaty with the Netherlands covering dividends, provided that certain anti-abuse requirements are met. Dividends paid by a Dutch Cooperative, which is a specific legal entity, are not subject to Dutch dividend withholding tax if the Dutch Cooperative does not predominantly operate as a holding or financing company. For further details, see Dividend withholding tax in Section B. In addition, the Dutch dividend withholding tax rate is typically reduced under the extensive Dutch tax treaty network (see Section F) to as low as 0%.

(c) From 1 January 2021, a conditional withholding tax applies to intra-group interest and royalty payments in certain wholly artificial or low-taxed situa tions. The rate of the withholding tax on interest and royalties is the same as the headline corporate income tax rate. Payments to payees in a jurisdiction with which the Netherlands has concluded a tax treaty are grandfathered to 1 January 2024.

(d) From 1 January 2022, losses may be carried back one year and carried for ward indefinitely. However, the offset of losses against taxable income is limited to the first EUR1 million of taxable income and, for taxable income in excess of EUR1 million, losses may only be offset up to 50% of this ex cess. Tax losses, including tax losses incurred through 31 December 2021 and still available for carry forward as of 31 December 2021, can be carried forward indefinitely.

B. Taxes on corporate income and gains

Corporate income tax. Corporate income tax is levied on resident and nonresident companies. Resident companies are those incor porated under Dutch civil law, European Companies (Societas Europaea, or SEs) and European Co-operative Societies (Societas Cooperativa Europaea, or SCEs) established in the Netherlands, even if their management and statutory seat are located abroad. In addition, companies are resident if incorporated under foreign law, but effectively managed and controlled in the Netherlands. Resident companies are subject to tax on their worldwide income. Nonresident companies, primarily branch offices of foreign companies doing business in the Netherlands, are taxable only on specific income items, such as real estate and business profits generated in the Netherlands.

As part of the implementation of the EU Anti-Tax Avoidance Directive 2 (ATAD 2), for financial years starting on or after 1 January 2022, entities formed under Dutch corporate law and/ or residing in the Netherlands that qualify as “reverse hybrid entities” are treated as domestic taxpayers that are fully liable to Dutch corporate income tax and become a withholding agent for Dutch withholding tax purposes. An entity is defined as a “re verse hybrid entity” if it is formed under Dutch corporate law or resides in the Netherlands and is considered transparent from a Dutch tax perspective (for example, a Dutch private limited partnership [besloten commanditaire vennootschap] or closed CV) whereby at least 50% of the voting rights, capital interests or profit rights in the entity must be directly or indirectly held by related participants that are resident in a jurisdiction that quali fies the entity as non-transparent. In short, a related entity is an entity that independently or as part of a cooperating group has an (indirect) interest of at least 25% in the reverse hybrid entity. This qualification also applies for withholding taxes.

Tax rates. The standard corporate tax rate is 25.8%. A step-up tax rate of 15% applies to the first EUR395,000 of taxable income. An effective tax rate of 9% is available for qualifying income related to certain intellectual property (IP). For details regarding this IP regime, see Innovation Box.

Innovation Box. If certain conditions are met, a taxpayer can elect to apply the Innovation Box. The aim of this regime is to encourage innovation and investment in research and development (R&D), including software development.

In the Innovation Box, net income from qualifying intellectual property is effectively taxed at a rate of 9%. The 9% rate applies

only to the extent that the net earnings derived from the selfdeveloped intangible assets exceed the development costs. The development costs are deductible at the statutory tax rate of 25.8% and form the so-called threshold. The Innovation Box regime can be elected with respect to a particular intangible asset; it is not required to include all intangibles. Advance Tax Rulings (ATRs) and Advance Pricing Agreements (APAs) are available (see Administration).

An important condition for the application of the Innovation Box is that the taxpayer must have been granted an R&D declaration from the Netherlands Enterprise Agency (Rijksdienst voor Ondernemend Nederland, or RVO; part of the Ministry of Economic Affairs) for a qualifying intangible asset created by or for the risk and account of the taxpayer.

In line with recommendations by the Organisation for Economic Co-operation and Development (OECD), effective from 1 January 2017, the definition of qualifying intangible assets is limited for so-called “large groups” (groups that have five-year revenues exceeding EUR250 million and stand-alone taxpayers that have five-year income from intangible assets exceeding EUR37.5 mil lion). For large groups, qualifying intangible assets are limited to patents or plant variety rights, software, marketing authorizations for human or animal medicines, intangible assets with a supple mental protection certificate from the Netherlands Patent Office, intangible assets with a registered utility model for the protection of innovation or an exclusive license for the use of the assets mentioned above.

For taxpayers that do not form part of a large group, other intangible assets can also qualify for the Innovation Box. In addition, other intangible assets can qualify for taxpayers forming part of a large group if such intangible assets are connected with intangible assets that fall within one of the above categories. For example, this connection between two or more intangible assets can be present if the intangible assets have been developed by the same research department or applied in the same product (group). Trademarks, logos and similar assets do not qualify.

The OECD’s modified nexus approach should be taken into consideration for purposes of calculating the income that can be taxed under the Innovation Box. Under the modified nexus approach, the proportion of eligible income is determined by reference to the ratio of “qualifying expenditures” compared to “overall expenditures” for the development of the qualifying intangible asset. This is expressed by the following formula:

Qualifying income =

Qualifying expenditures x 1.3 x Income from intangible assets

Overall expenditures

The income from intangible assets can include all types of in come, including royalties, capital gains and embedded income (for example, the sales price of a product).

Foreign royalty withholding tax can normally be credited against Dutch corporate income tax, but the amount of the credit is lim ited to the Dutch corporate income tax attributable to the relevant net royalty income.

The following grandfathering rules have been put in place to facilitate the transition from the pre-2017 Innovation Box to the current Innovation Box:

• The pre-2017 regime remains applicable to intangible assets that have been self-developed before 1 July 2016 if the taxpayer opts to apply the Innovation Box in the tax return that includes the aforementioned date. This grandfathering rule will be dis continued for tax years beginning on or after 1 July 2021.

• Intangible assets developed before 1 January 2017 for which a patent or a plant variety right has been granted will qualify for the current Innovation Box, even if no R&D-declaration has been granted.

• Specific rules have been put in place to determine the nexus ratio in the first years of the new regime. These rules will be discontinued for tax years beginning on or after 1 January 2021.

R&D tax credit. An employer established in the Netherlands that is performing R&D is eligible for the R&D tax credit (Wet Bevordering Speur-en Ontwikkelingswerk, or WBSO), regardless of its size or industry. The WBSO is a tax incentive, which offers an immediate benefit on wage costs and other costs and expenses for R&D activities. All R&D cost and expenses will be settled through a reduction of the payroll tax due from an employer.

An R&D declaration must be obtained from the RVO. The benefit from the WBSO can amount up to 40% of the qualifying costs and expenditures. For R&D costs and expenditures that are not labor costs, a company can choose a fixed rate or a calculation of the actual amount of costs and expenses.

Capital gains. No distinction is made between capital gains and other income. In certain cases, capital gains are exempt (for example, if the participation exemption described in Section C applies) or a rollover is available based on case law or under the reinvestment reserve (see the discussion in Provisions in Section C).

Administration. The standard tax year is the financial year (as indicated in the articles of association of a taxpayer).

Tax returns. An annual Dutch corporate income tax return must be filed with the tax authorities within 5 months after the end of the tax year, unless the company applies for an extension (nor mally, an additional 11 months based on an agreement between the tax advisors and the tax authorities).

Companies must make partial advance payments of corporate income tax during the year, based on preliminary assessments. The preliminary assessments are based on the expected final assessment. For 2022, assuming the tax year corresponds to the calendar year, the assessments are levied according to the following schedule:

• The first preliminary assessment is generally imposed on 31 January 2022. The tax administration may estimate the profit by applying a percentage to the average fiscal profit of the previous two years. If the taxpayer can plausibly show that the expected final assessment will be a lower amount, the pre liminary assessment is based on that amount.

• The second preliminary assessment is generally imposed at the end of the eighth month of 2022. This preliminary assessment is derived from an estimate made by the taxpayer.

These preliminary assessments may be paid in as many monthly installments as there are months remaining in the year. It is important that taxpayers provide a timely and accurate estimate of the taxable income. If the preliminary corporate income tax lia bility is understated, this may result in a charge of tax interest when the tax assessment appears to be higher. Tax interest is cal culated for the period that begins six months after the tax year to which the tax liability relates and is based on the amount of ad ditional tax due. If the preliminary corporate income tax liability is overstated, this may not result in a tax interest refund when the tax assessment appears to be lower.

The final assessment is made within three years (plus any exten sions granted) from the time the tax liability arises.

The tax authorities may impose ex officio assessments if the tax payer fails to file a return or fails to meet the deadline to file a return. Penalties may apply.

Additional assessments may be imposed if, as a result of deliber ate actions by the taxpayer, insufficient tax has been levied. A penalty of 100% of the additional tax due may be levied. Depending on the degree of wrongdoing, this penalty is normally reduced to 25% or 50%.

Rulings. Rulings are agreements concluded with the tax authori ties confirming to the Dutch tax consequences of transactions or situations involving Dutch taxpayers. Rulings are based on Dutch tax laws that apply at the time of the request.

For certainty in advance regarding general transfer-pricing matters (see Section E), an APA can be concluded with the tax authorities. APAs provide taxpayers with up-front certainty regarding the arm’s-length nature of transfer prices. All Dutch APAs are based on OECD transfer-pricing principles and require the taxpayer to file transfer-pricing documentation with the tax authorities. APAs can be entered into on a unilateral, bilateral or multilateral basis (that is, with several tax administrations). APAs may cover all or part of transactions with related parties, including transactions involving permanent establishments.

For most other matters (for example, the applicability of the par ticipation exemption) or the existence or nonexistence of a per manent establishment in the Netherlands or abroad, an ATR can be concluded.

The benefit of an APA or ATR is that companies can obtain cer tainty in advance regarding their Dutch tax position (for example, before the investment is made).

The ruling process with the tax authorities may require a prefiling meeting. In general, rulings are concluded for a period of four or five years, but facts and circumstances may allow for a longer or shorter term. If the facts and legislation on which the APA or ATR is based do not change, in principle, the APA or ATR can be renewed indefinitely. No fees are required to be paid when filing an APA or ATR request with the Dutch tax authorities. The time required for the total process from initiation of the ruling process to conclusion of the ruling depends on the

circumstances. However, in general, it takes between 6 to 10 weeks from the date of the filing of the ruling request to obtain the ruling. It is often possible to expedite the process if required from a commercial perspective (for example, merger and acquisition transactions).

As of 1 July 2019, the new Dutch policy in relation to rulings with an international character has entered into force. This new policy should be viewed as another step to being more transpar ent and to further combating undesired international structures that, for example, lack relevant substance, while at the same time maintaining an accessible and robust ruling process for genuine operations. As part of this policy, the prior minimum Dutch sub stance requirements that should be met in order to be eligible for a tax ruling is replaced with the Dutch “economic nexus” requirement. To have sufficient nexus with the Netherlands (and therefore be eligible to enter into a ruling), the Dutch taxpayer (or other Dutch group company) should conduct operational activi ties in the Netherlands relevant to the activities that form the subject of the ruling request. The group should have appropriate personnel in the Netherlands to manage the risks associated with these activities.

Rulings are no longer issued if the sole or predominant purpose of the relevant case or structure is to reduce Dutch or foreign taxes or if the entities involved are established in non-cooperative tax jurisdictions (EU list) or in a low-tax jurisdiction (jurisdic tions with a corporate income tax rate below 9%).

In addition, the Dutch tax authorities publish anonymized extracts of the rulings as well as an annual overview of the number of issued rulings. Also, in case of a ruling process not result ing in a ruling, there will still be a summary published providing the reason why no ruling was concluded. The extracts are highly abstracted in order to ensure that the facts do not allow for tax payers to be identified indirectly.

In line with the OECD’s Base Erosion and Profit Shifting (BEPS) Action 5 and the EU directive on the automatic exchange of in formation on tax rulings, the Netherlands has commenced the exchange of information with respect to certain tax rulings in 2016. To facilitate the exchange of information on tax rulings, specific templates that cover generic information and a highlevel summary of the agreed-upon ruling should be submitted to the Dutch tax authorities during the ruling process.

Dividend withholding tax. The statutory withholding tax rate for dividends is 15%. However, several exemptions and reductions, as described below, can apply. Under the extensive Dutch treaty network (see Section F), the Dutch dividend withholding tax rate is typically reduced to a rate as low as 0% for qualifying partici pation dividends. Under the participation exemption (see Section C) or within a Dutch fiscal unity (see Section C), divi dends paid by resident companies to other resident companies are usually exempt from dividend withholding tax.

A broader domestic dividend withholding tax exemption is avail able for dividend distributions made by Dutch resident entities to the following:

• EU/EEA member state resident investors that are not treated as a resident outside the EU/EEA under a tax treaty between the EU/EEA state and a third state (for this purpose, the EEA is limited to Iceland, Liechtenstein and Norway)

• Investors that are resident in a country that has concluded a tax treaty with the Netherlands covering the treatment of dividends

The domestic dividend withholding tax exemption applies if the recipient holding an interest in the Dutch dividend distributing entity would qualify for the Dutch participation exemption ben efits if that investor resided in the Netherlands and if certain anti-abuse rules that target, among other items, hybrid recipients, are met. The withholding tax exemption does not apply if the foreign shareholder fulfills a function similar to a Dutch fiscal investment company or tax-exempt investment company.

To apply the domestic withholding tax exemption for dividend distributions to foreign recipients, the Dutch taxpayer should notify the Dutch tax inspector that all of the requirements listed above are met. Such notification should take place within one month after the dividend resolution.

The dividend withholding tax rules are not applicable to Dutch Cooperatives (specific legal entities) that do not predominantly perform holding and/or financing activities and that have opera tional activities and the relevant substance to carry out these activities. Dividend distributions made by this type of Dutch Cooperatives are not subject to Dutch dividend withholding tax based on domestic law.

As part of the implementation of the EU ATAD 2, reverse hybrid entities (see definition in Corporate income tax) are withholding agents for Dutch dividend withholding tax as from 1 January 2022.

Measures to combat dividend stripping. The Dividend Withholding Tax Act provides measures to combat dividend stripping. Under these measures, a reduction of dividend withholding tax is available only if the recipient of the dividends is regarded as the beneficial owner of the dividends. The measures provide that a recipient of dividends is generally not regarded as the beneficial owner if the following cumulative criteria are met:

• The dividend recipient entered into a transaction in return for the payment of the dividends as part of a series of transactions.

• As part of the series of transactions, the payment of the dividends indirectly benefits a person who would have been entitled to a lesser (or no) reduction, exemption or refund of dividend tax than the recipient.

• The person indirectly benefiting from the dividends maintains or acquires an interest in the share capital of the payer of the dividends that is comparable to the person’s position in the share capital before the series of transactions.

Share repurchases. Publicly listed companies are not required to withhold dividends tax when they repurchase their own shares if certain requirements are met. One of these requirements is that the company must not have increased its share capital in the four years preceding the repurchase. This requirement does not apply if the share capital was increased for bona fide business reasons.

Credit for dividend withholding tax. A Dutch company may credit a portion of the foreign dividend withholding tax imposed on dividends received against any Dutch withholding tax due on its dividend distributions if certain conditions are satisfied. The credit is generally 3% of the gross amount of qualifying dividends received. However, if the dividends received are not passed on in full by the Dutch company, the credit is 3% of the dividend distribution made by the Dutch company.

Interest and royalty withholding tax. As of 1 January 2021, a conditional withholding tax applies to intra-group interest and royalty payments to an entity resident (or allocable to a permanent establishment) in a jurisdiction that is included on the Dutch list of jurisdictions with a statutory tax rate lower than 9% or a juris diction that is included on the EU list of non-cooperative jurisdic tions (see Controlled foreign companies in Section E for the list). The Dutch government publishes a list at the end of each year that includes jurisdictions that qualify as low-tax jurisdictions (juris diction with a statutory tax rate lower than 9% per the cutoff date of 1 October) or jurisdictions that are included on the EU prohib ited list at that time. Only jurisdictions that are included on the list for the preceding calendar year are in scope of the conditional withholding tax. In addition, interest and royalty withholding tax is due in certain abusive situations. Payments to payees in a juris diction with which the Netherlands has concluded a tax treaty are grandfathered to 1 January 2024. In principle, all Dutch payers of interest or royalties can be withholding agents for this withhold ing tax; special rules apply if reverse hybrid entities (see Corporate income tax) are involved.

Having (relevant) substance in the Netherlands or in the receiving (prohibited list jurisdictions does not provide for an exception from the withholding tax. The legislation also targets abusive situations in which conduit companies (resident in a non-prohibited list jurisdiction) are interposed between the Netherlands and a prohibited list jurisdiction. If such a conduit company does not meet certain the substance requirements, with holding tax remains due.

Affiliated entities. The withholding tax will only be due on inter est and royalty payments to affiliated entities. Entities are affili ated if they are of an associated group. This criterion depends on facts and circumstances, but parliamentary proceedings refer to coordinated group decisions. In addition, entities will be consid ered affiliated if a qualifying interest is (indirectly) held, also taking into account joint parent companies. A qualifying interest exists if influence can be exercised on decisions regarding the activities of the entity. In any case, a qualifying interest exists if more than 50% of the statutory voting rights are held.

Interest and royalty payments. Withholding tax is due on deemed, accrued, imputed or paid interest and royalties. Corrections are

made if the interest or royalty payment (and/or the absence thereof) is not at arm’s length.

Moment of taxation. The interest or royalty payments are consid ered to have been received at the time when they have been paid or settled, made available to the beneficiary, become interestbearing or become claimable and collectible. If interest or royalties have matured during the period but have not yet been received, the income will be considered to have been enjoyed yearly on 31 December of that year.

Tax rate. The rate of the withholding tax is equal to the headline corporate income tax rate (25.8% in 2022). It is not relevant whether the interest and/or royalty payments are deductible for corporate income tax purposes.

Tax treaty with low-tax jurisdiction. With respect to low-taxed jurisdictions with whom the Netherlands has concluded a tax treaty, a three-year grandfathering period will apply before the withholding tax is levied. Within this three-year period, the Netherlands will approach the treaty partner to renegotiate and amend the respective treaty.

Expansion of scope to dividends. From 2024, this conditional withholding tax will also apply to dividends in a similar fashion. It is intended that any conditional withholding tax on dividends due will be reduced by any dividend withholding tax due under the existing Dividend Withholding Tax Act.

Foreign tax relief. Under unilateral provisions in the corporate in come tax act, the Netherlands exempts foreign business profits derived through a permanent establishment, profits from real estate located abroad and certain other types of foreign income from corporate income tax. If the income is derived from a tax treaty country, the exemption applies with consideration of the relevant treaty provisions (for example, a “subject-to-tax” require ment). If such foreign (operational) income is derived from a non-treaty country, no “subject to tax” requirement applies. To the extent that the foreign business income is negative, this amount does not reduce Dutch taxable income unless the foreign business is terminated (object exemption/territorial system). A credit is available for profits allocable to low-taxed portfolio in vestment/passive branches.

C. Determination of taxable income

General. The fiscal profit is not necessarily calculated on the basis of the annual financial statements. In the Netherlands, all com mercial accounting methods have to be reviewed to confirm that they are acceptable under fiscal law. The primary feature of tax accounting is the legal concept of “sound business practice.”

Expenses incurred in connection with the conduct of a business are, in principle, deductible. However, certain expenses are not deductible, such as fines and penalties, and expenses incurred with respect to a crime. Certain expenses are partially deductible, such as meals, drinks and conferences. Restrictions are imposed on the deductibility of certain related-party interest expense (see Section E).

Functional currency. Taxpayers must calculate their taxable in come in euros. On request, Dutch corporate tax returns may be calculated in the functional currency of the taxpayer, provided the financial statements of the relevant financial year are prepared in that currency. The financial statements may be expressed in a foreign currency if it is justified by the company’s business or the international nature of the company’s group. If this regime is ap plied, in principle, the functional currency must be used for at least 10 years. Only currencies listed by the European Central Bank qualify for the regime.

Inventories. Inventories are generally valued at the lower of cost or market value, but the last-in, first-out (LIFO) and the base stock methods of valuation are acceptable if certain conditions are fulfilled. Both methods make it possible to defer taxation of inventory profits. Valuation under the replacement-cost method is not accepted for tax purposes.

Provisions. Dutch law permits the creation of tax-free equalization and reinvestment reserves.

The equalization reserve may be established in anticipation of certain future expenditure that might otherwise vary considerably from year to year, such as ship maintenance, overhauling, pension payments or warranty costs.

If certain conditions are met, the tax book profit arising from the disposal of a tangible or intangible business asset may be carried forward and offset against the acquisition cost of a reinvestment asset. This is known as a reinvestment reserve. The reinvestment asset must be purchased within three years after the year in which the reinvestment reserve was established. If a reinvestment asset is not purchased within three years after the establishment of the reinvestment reserve, the amount in the reinvestment reserve is included in taxable income for corporate income tax purposes in the third year following the year in which the reinvestment reserve was established. The offset of the book profit may not reduce the book value of the reinvestment asset below the book value of the asset that was sold. An amount that cannot be offset as a result of the rule described in the preceding sentence may continue to be carried forward if the condition of the same economic function for the reinvestment does not apply (see below). If the depreciation period for the reinvestment asset is more than 10 years or if the reinvestment asset is not depreciable, the reinvestment asset must fulfill the same economic function as the asset that was sold. The condition of the same economic function for the reinvestment does not apply to reinvestment assets with a depreciation period of 10 years or less.

Participation exemption. All companies resident in the Netherlands (except qualified investment companies that are subject to a corporate income tax rate of 0%), including holding companies, are in principle exempt from Dutch corporation tax on all benefits connected with certain qualifying shareholdings (participations). Benefits include cash dividends, dividends-in-kind, bonus shares, “hidden” profit distributions and capital gains realized on disposal of the shareholding. If dividends are paid after the date of the declaration of the dividend, potential foreign-exchange results incurred on the dividend receivable over the interim period (that is, in case the dividend is denominated in a different

currency than the currency used by the Dutch shareholder for tax purposes) are not exempt under the participation exemption.

A capital loss that might result from the disposal of the share holding is similarly nondeductible. However, a liquidation loss of a subsidiary company may be deductible under certain circum stances. The liquidation loss rules of a subsidiary have been tightened further as of 1 January 2021. Liquidation losses can only be deducted up to EUR5 million unless the subsidiary is resident in the EU/EEA and the Dutch taxpayer holds an interest of more than 50% (or interest with decisive influence on the subsidiary’s activities).

The participation exemption applies to all (rights to) interests of 5% or more in the nominal paid-up capital of the subsidiary, un less the participation is a “portfolio investment” (determined through the motive test; see below). A less than 5% direct share holding may be a qualifying participation if a company related to the taxpayer owns an interest of at least 5% in the same subsidiary. If the shareholding is reduced to less than 5% (for example, as a result of a dilution or another event), the participation ex emption may still apply for a period of three years from the date the 5% threshold is no longer met. A condition for applying the participation exemption during the three-year period is that the shareholding must have been owned by the Dutch shareholder for more than one year during which the Dutch shareholder was able to fully benefit from the Dutch participation exemption. If the participation can be considered a “portfolio investment” on a particular date, the Dutch shareholder may no longer benefit from the participation exemption as of such date.

The motive test is applied to determine whether a participation is a “portfolio investment.” In general, the motive test is met if the shares in the subsidiary are not merely held for the return that can be expected from normal asset management. In a limited number of specific situations, the participation is deemed to be held as a portfolio investment, which is generally determined based on the function, turnover, profit and assets of the subsidiary. However, even if the motive test is not met, the Dutch taxpayer may still benefit from the participation exemption if the reasonable tax test or the asset test is met.

The reasonable tax test is satisfied if the direct subsidiary is subject to a profit tax that results in a reasonable levy of profit tax in accordance with Dutch tax standards. Based on the parliamentary history, in principle, the local tax system needs to be compared with the Dutch tax system. The primary elements that are taken into account for this assessment are the tax base and the local statutory corporate income tax rate. In general, a statutory profit tax rate of at least 10% qualifies as a reasonable levy if no significant deviations exist between the local tax system and the Dutch tax system. Such significant deviations include, among others, a tax holiday, a cost-plus tax base with a limited cost base and the absence of anti-abuse limitation provisions with respect to the interest deduction.

The asset test is satisfied if less than half of the assets of the direct subsidiary usually consists of, directly or indirectly, lowtaxed “free” portfolio investments on an aggregated basis. The portfolio investments are considered “free” if the investments are

not used in the course of the business of the company or if the investments are part of certain intra-group transactions. Real estate and rights directly or indirectly related to real estate are excluded from the definition of a portfolio investment. As a result, the participation exemption normally applies to benefits from real estate participations.

Subject to prior approval of the Dutch tax authorities, a taxpayer can apply the participation exemption to the foreign-exchange results relating to financial instruments that hedge the foreignexchange exposure on qualifying participations.

Compartmentalization reserve. Under rules that were introduced in 2013, companies claiming exemption from corporate income tax (under the 2007 revised participation exemption rules) for dividends received from foreign subsidiaries must apportion the income to the year in which it originated. It prevents companies from claiming the exemption on income originating from a nonexempt period (so-called compartmentalization rules). Under these rules, a taxpayer must create a fiscal “Compartmentalization reserve” if it holds a (share) interest in a company to which the participation exemption no longer applies and if the participation exemption did apply until that moment (and vice versa). Taxpayers should consult their Dutch tax advisors to obtain further details regarding these rules.

Hybrid loans. The participation exemption is not available for certain benefits derived from so-called hybrid loans. Under this measure, the participation exemption does not apply to income derived from participations to the extent that the corresponding payments are, directly or indirectly, deductible at the level of the participation.

Tax depreciation. In principle, depreciation is based on historical cost, the service life of the asset and the residual value. Depreciation is limited on buildings, goodwill and other assets.

Buildings. Buildings (including the land and surroundings on which they were erected) can be depreciated only for as long as the tax book value does not drop below the threshold value. Buildings may not be depreciated to a tax book value lower than the threshold value. The threshold value of buildings held as a portfolio in vestment equals the value provided in the Law on Valuation of Real Estate (Wet Waardering Onroerende Zaken), known as the WOZ value. Effective from 1 January 2019, the threshold value of buildings used in the taxpayer’s business or a related party’s busi ness equals 100% of the WOZ value. If a building that has been acquired before 1 January 2019 and that is less than three years old has been depreciated, a grandfathering rule applies, and it can be depreciated down to 50% of the WOZ value within three years. In principle, the WOZ value approximates the fair market value of the real estate. The local municipality determines the WOZ value annually. If the threshold value increases, tax depreciation that had been previously claimed is not recaptured.

Goodwill and other assets. Goodwill must be depreciated over a period of at least 10 years. As a result, the maximum annual depreciation rate is 10%. If the goodwill is useful for a longer period, this period must be taken into account. These rules apply

only to acquired goodwill. Costs in relation to self-developed goodwill can be deducted when incurred. For other assets such as inventory, cars and computers, the depreciation is limited to an annual rate of 20% of historical cost.

Limitations on the depreciation of business assets. Effective from 1 January 2022, the Dutch government has introduced certain limitations to the depreciation of business assets if the deprecia ble asset was acquired by a Dutch taxpayer in financial years starting on or after 1 July 2019 but before 1 January 2022, and if the agreed transfer price was below the arm’s-length value (see Section E).

Groups of companies. Under the Dutch fiscal unity regime, a group of companies can be treated as one taxpayer for Dutch tax pur poses. The fiscal unity regime has the following characteristics:

• To elect a fiscal unity, among other requirements, Dutch taxpay ers must be connected to each other through at least 95% of the entire legal and economic ownership of shares. A connection can be established through a common (indirect) parent company that is either a Dutch resident company that forms part of the fiscal unity itself, or a common (indirect) parent that is resident in an EU/EEA country. In the case of indirect ownership, the intermediate owner of the shares must also either be a Dutch resident company that forms part of the fiscal unity itself or a company resident in an EU/EEA country.

• Both Dutch and certain foreign companies may be included in a fiscal unity if their place of effective management is located in the Netherlands and if the foreign company is comparable to a Dutch besloten vennootschap (BV) or naamloze vennootschap (NV).

• A permanent establishment in the Netherlands of a company with its effective management abroad may be included in, or can be the parent of, a fiscal unity.

• A subsidiary may be included in the fiscal unity from the date of acquisition or incorporation.

Advantages of such group treatment include the following:

• Losses of one subsidiary may be offset against profits of other members of the group.

• Reorganizations, including transfers of assets with hidden re serves from one company to another, have no direct fiscal consequences.

• Intercompany profits between members of a Dutch fiscal unity may be fully deferred.

Because only Dutch resident entities can be included in a Dutch fiscal unity and this can have several advantages, two cases were initiated at the European Court of Justice (ECJ). In these cases, the ECJ needed to decide whether the Dutch fiscal unity is in accordance with EU rules and the EU freedom of establishment. On 25 October 2017, the Advocate General (AG) of the ECJ of the EU issued an opinion with respect to these cases. According to the AG, some benefits should also be granted in cross-border situations. On 22 February 2018, the EU Court of Justice ruled that certain elements of the Dutch fiscal unity regime were in violation of EU law and the EU principle of freedom of establishment.

In response to the ECJ court case, the Dutch government intro duced emergency legislation. Under this emergency legislation, certain tax rules (such as the interest deduction limitation rule to prevent base erosion, excessive participation debt rules and loss relief rules in case of a change in ownership) apply as if no fiscal unity exists. Most of these measures have been implemented into law with retroactive effect from 1 January 2018.

Relief for losses. Effective from financial years starting on or after 1 January 2022, losses of a company may be carried back one year and carried forward indefinitely (previously six years). However, the offset of tax losses against taxable income will be limited. Such losses can be fully offset against the first EUR1 million of taxable income, and, for taxable income in excess of EUR1 million, losses may only be offset up to 50% of this excess. This applies to both the carryback and carryforward of tax losses. Tax losses, including tax losses incurred through the 2021 financial year and still available for carryforward as of the 2022 financial year, will become available for carryforward indefinitely.

For tax losses from the 2011 and 2012 financial years, the car ryforward period was nine years and that will not change (that is, if these losses are not settled by end of the 2020 and 2021 finan cial years, respectively, these losses will be forfeited).

Effective from 1 January 2019, there are no longer restrictions on losses incurred by holding and financing companies. However, restrictions on loss relief remain with respect to losses of holding and financing companies incurred before 2019. The restrictions apply to a company if holding activities and direct or indirect financing of related parties account for at least 90% of the com pany’s activities during at least 90% of the financial year.

The Corporate Income Tax Act contains specific rules to combat the trade in so-called “loss companies.” If 30% or more of the ultimate interests in a Dutch taxpayer changes among ultimate shareholders or is transferred to new shareholders, in principle, the losses of the company may not be offset against future prof its. However, many exceptions to this rule exist (for example, the going-concern exception). The company has the burden of proof with respect to the applicability of the exemptions. A similar rule applies to companies with a reinvestment reserve and other attributes (such as tax credit carryforwards). With retroactive effect from 1 January 2018, the Dutch government has introduced leg islation providing that these rules need to be applied as if no fiscal unity exists (if applicable).

D. Value-added tax

Value-added tax is imposed on goods delivered and services ren dered in the Netherlands other than exempt goods and services. The general rate is 21%. Other rates are 0% and 9%.

E. Miscellaneous matters

Controlled foreign companies. Effective from January 2019, the Netherlands introduced the controlled foreign company (CFC) rule as outlined in the EU Anti-Tax Avoidance Directive.

Under the Dutch regime, a foreign company or a permanent establishment qualifies as a CFC if both of the following conditions are satisfied:

A Dutch taxpayer has a permanent establishment or an interest of more than 50% in a foreign company.

The entity or branch is tax resident in a jurisdiction listed on the EU list of non-cooperative jurisdictions (EU prohibited list or in a low-tax jurisdiction (that is, a jurisdiction with a statutory corporate income tax rate below 9%).

The relevant EU prohibited list jurisdictions and low-tax jurisdic tions are published on a list issued annually by the Dutch govern ment. For the 2022 financial year, the list includes the following jurisdictions:

American Samoa

Anguilla

Bahamas

Bahrain

Barbados

Bermuda

British Virgin Islands

Cayman Islands

Fiji

Guam

Guernsey

Isle of Man

Jersey

Palau

Panama

Samoa

Trinidad and Tobago

Turkmenistan

Turks and Caicos Islands

United Arab Emirates

US Virgin Islands

Vanuatu

If the above conditions are satisfied, the undistributed tainted profit of the CFC is to be included in the Dutch tax base on a pro rata basis. The income to be included in the Dutch tax base consists of specific tainted categories of passive income (dividends, interest, financial lease income, royalties and others). The CFC income is not included in the taxable income of the Dutch entity if the CFC’s income does not consist of more than 70% of such passive income.

As an exception, the Dutch CFC rule does not apply if the CFC has “substantial economic activities.” If the CFC satisfies the increased minimum substance requirements in its jurisdiction, this is a presumption of proof that substantial economic activities are performed; however, this is not a safe harbor (and taxpayers can demonstrate substantial economic activities in other ways). These increased minimum substance requirements include, among others, the following salary costs’ requirement and office space requirement:

The salary costs of the relevant company must amount to at least EUR100,000 annually.

The office space must be at the disposal of the relevant com pany for a period of at least 24 months.

Dutch (financial) services companies. Dutch companies that pri marily perform intercompany financing and licensing activities must bear a certain level of risk with respect to these activities. A safe-harbor test involving a requirement with respect to minimum equity at risk determines whether sufficient risk is involved.

Dutch tax law contains substance requirements for companies principally engaged in intercompany financing and/or licensing activities. For such Dutch companies that claim the benefits of a tax treaty or EU Directive (treaty benefits), they must declare in their annual corporate income tax return whether the taxpayer meets a defined set of substance requirements. If one or more of these requirements are not met and if the company has claimed the benefits of a tax treaty, the Dutch tax authorities notify the foreign tax authorities. This is a simple notification. It is up to the foreign tax authorities to take action regarding this notification. Taxpayers should consult their Dutch tax advisors to discuss these rules in more detail. As of 2021, the following two sub stance requirements are added:

• A minimum annual salary expense of EUR100,000

• An office lease of at least 24 months

Ultimate Beneficial Owner Register. Based on the Anti-Money Laundering Directive, which the Netherlands implemented on 25 July 2018, EU member states are required to register the ulti mate owner or stakeholder of corporate and legal entities incor porated in their territory in the Ultimate Beneficial Owner Register.

Foreign-exchange controls. No real restrictions are imposed on the movement of funds into and out of the Netherlands.

Debt-to-equity rules and other restrictions on deductibility of interest

Statutory thin-capitalization rules. Effective from 1 January 2013, the statutory thin-capitalization rules were abolished. However, the Dutch government has introduced legislation, effective from 1 January 2019, providing that tier-1 capital (a bank’s core capi tal) is no longer qualified as debt from a Dutch tax perspective and therefore the payments under tier-1 capital are qualified as dividend payments (and therefore no longer deductible). This applies for tax years starting on or after 1 January 2019 and also applies to tier-1 capital issued before 1 January 2019.

In addition, effective from 1 January 2020, the Dutch govern ment has introduced an interest deduction limitation rule for banks and insurance companies, which limits the deductibility of interest expenses to the extent that the amount of debt exceeds 92% of the balance of the taxpayer.

Other anti-base erosion provisions. The deduction of interest paid, including related costs and currency exchange results, by a Dutch company on a related-party loan is in principle disallowed to the extent that the loan relates to any of the following transactions: • Dividend distributions or repayments of capital by the taxpayer or by a related Dutch company to a related company or a related individual resident in the Netherlands

• Capital contributions by the taxpayer, by a related Dutch com pany or by a related individual resident in the Netherlands into a related company

• The acquisition or increase of an interest by the taxpayer, by a related Dutch company or by a related individual resident in the Netherlands in a company that is related to the taxpayer after this acquisition or extension

This rule does not apply to such negative interest and/or currency exchange results to the extent that the total results on a loan are positive (that is, in such case, this positive income is taxable). This should be determined per loan.

This interest deduction limitation does not apply if either of the following conditions is satisfied:

• The loan and the related transaction are primarily based on business considerations. Effective from 1 January 2018, Dutch tax law specifically states that the test as to whether the loan is predominantly business driven and based on business considerations should be satisfied for both loans to related entities and loans that can be indirectly linked to third parties.

• At the level of the creditor, the interest on the loan is subject to a tax on income or profits that results in a levy of at least 10% on a tax base determined under Dutch standards. In addition, such interest income may not be set off against losses incurred in prior years or benefit from other forms or types of relief that were available when the loan was obtained. In addition, the loan may not be obtained in anticipation of losses or other types of relief that arise in the year in which the loan was granted or in the near future. Furthermore, even if the income is subject to a levy of at least 10% on a tax base determined under Dutch standards at the level of the creditor, interest payments are not deductible if the tax authorities can demonstrate it to be likely that the loan or the related transaction is not primarily based on business considerations.

Hybrid loans. Interest expense incurred on loans that are (deemed) to function as equity for Dutch tax purposes is not deductible and may be subject to Dutch dividend withholding tax.

Acquisition interest limitation. Effective from 1 January 2019, the acquisition interest limitation rules were abolished.

Participation interest limitation. Effective from 1 January 2019, the participation interest limitation rules were abolished.

Earning stripping interest limitation rule. Effective from 1 January 2019, the Netherlands introduced the 30% Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) rule in line with the interest deduction limitation rules as outlined in the EU Anti-Tax Avoidance Directive. However, for financial years starting on or after 1 January 2022, the threshold of 30% is reduced to 20% of the EBITDA. The earning stripping rule is a general limitation of the deduction of the net balance of interest paid and interest received, under which the deduction is limited to 20% of the EBITDA. This rule is applied at the level of the Dutch fiscal unity, taking into account the taxable EBTIDA of the fiscal unity.

The Netherlands have taken the following approach in imple menting the 20% EBITDA rule:

• The earning stripping rule does not contain a group escape.

• The threshold for deductible interest is set at EUR1 million.

No grandfathering is available for existing loans. Any nondeduct ible interest expenses can be carried forward and will be available to offset future taxable income in other years (to the extent that a taxpayer has sufficient EBITDA). Effective from 1 January 2020, specific rules to combat the trade in so-called “interest compa nies” have been introduced. If 30% or more of the ultimate inter ests in a Dutch taxpayer changes among ultimate shareholders or is transferred to new shareholders, in principle, similar to losses, the carryforward of nondeductible interest expenses of the company can become restricted.

Transfer pricing. The Dutch tax law includes the arm’s-length principle (codified in the Corporate Income Tax Act). The arm’slength principle implies that for the determination of taxable income, related-party transactions should be based on terms and conditions that would have applied in comparable circumstances if the involved parties were not related.

In an international context, this could result in downward adjustments of taxable income in the Netherlands as a result of transfer pricing adjustments, but without corresponding upward adjust ments at the level of the other (foreign) party. As such, to combat these transfer pricing mismatches, the Dutch government has introduced certain revisions to the arm’s-length principle. For financial years starting on or after 1 January 2022, downward adjustments of taxable income will only be considered if and to the extent there are corresponding upward adjustments in the other jurisdiction at the level of the related counterparty. For example, this could apply to interest rate adjustments in the case of relatedparty financing. Similarly, for assets acquired from or transferred by related parties through capital contributions, capital repay ments, (liquidation) distributions and legal mergers, an upward adjustment of the asset’s cost price at the level of the Dutch taxpayer (transferee) would be allowed only to the extent that a cor responding adjustment is recognized in the taxable base of a profit tax at the level of the transferor. Finally, a conceptually similar, but opposite adjustment mechanism, is included for inter company debt transferred to a Dutch taxpayer below the arm’slength value.

The enacted legislation also affects transactions in which a depre ciable business asset was acquired by a Dutch taxpayer in finan cial years starting on or after 1 July 2019 but before 1 January 2022, if the transfer price agreed was below the arm’s-length value or, in certain cases (capital transactions), if the fair market value of the asset was not taxable at the level of the transferor. In such cases, the rules would recognize a transfer at the arm’s length value but will subsequently limit the amortizable basis for such business asset in financial years starting on or after 1 January 2022, effectively limiting the annual tax depreciation. The depreciable tax basis for a business asset subject to this tran sitional measure is generally set at the lesser of the following:

• The (lower) commercial value agreed between the Dutch tax payer and its foreign affiliate (or in some cases, the value that

was taxable at the level of the transferor) at the time of the acquisition

• The remaining depreciable basis in the opening balance sheet of the Dutch taxpayer for its financial year starting on or after 1 January 2022

Transfer pricing documentation. The Dutch tax law contains specific transfer pricing documentation requirements. Transactions between associated enterprises (controlled transactions) must be documented. Such documentation should include a description of the terms of the controlled transactions, the entities (and perma nent establishments) involved and a thorough analysis of the socalled five comparability factors (both from the perspective of the controlled transactions and companies and uncontrolled transactions and companies), of which the functional analysis is the most important. The documentation must establish how transfer prices were determined and provide a basis for determining whether the terms of the intercompany transactions would have been adopted if the parties were unrelated. If such information is not available on request in the case of an audit or litigation, the burden of proof with respect to the arm’s-length nature of the transfer prices shifts to the taxpayer. Also, the taxpayer is exposed to possible noncom pliance penalty charges. Taxpayers can use the Dutch transferpricing decrees for guidance. These decrees provide the Dutch interpretation of the OECD transfer-pricing guidelines.

Additional transfer-pricing requirements in the Dutch tax law took effect on 1 January 2016. In line with the OECD’s report on Action 13 of the BEPS plan, new standards for transfer-pricing documentation were introduced. These new standards consist of a three-tiered structure for transfer-pricing documentation that includes a master file, a local file and a template for a Countryby-Country (CbC) Report.

The CbC Report applies to Dutch tax resident entities that are members of a multinational enterprise (MNE) group with con solidated group turnover exceeding EUR750 million in the tax year preceding the tax year to which the CbC Report applies. In addition, Dutch tax resident entities of a MNE group also have to prepare a master file and a local file if the group has consoli dated group turnover exceeding EUR50 million in the tax year preceding the tax year for which the tax return applies.

A Dutch tax resident that is a member of a MNE group must notify the Dutch tax authorities as to which entity within the MNE group will file the CbC Report by the last day of the report ing year (for example, if the reporting year is the calendar year, a notification must be filed by 31 December 2019). This is a recur ring requirement.

The Dutch government has also issued further guidance on the master, local file and CbC reporting requirements through Ministerial Regulations. Taxpayers should consult their Dutch tax advisors to discuss these rules in more detail in order to ensure that they are compliant with their reporting and documentation obligations.

APAs can be concluded with the Dutch tax authorities with re spect to transfer pricing (see Section B).

Anti-hybrid mismatch rules. Effective from 1 January 2020, the Netherlands has introduced anti-hybrid rules to comply with the second part of the EU Anti-Tax Avoidance Directive to tackle hybrid mismatches between affiliated entities.

Hybrid mismatches targeted. The legislation contains provisions to target hybrid mismatches between affiliated entities resulting from the following:

• Hybrid entities

• Hybrid financial instruments and payments made thereunder

• Hybrid permanent establishments

• Deemed branch payments

• Hybrid transfers

• Imported mismatches

• Dual residency cases

Affiliated entities. The anti-hybrid rules apply only in case of mismatches between affiliated entities or in a so-called structured arrangement. Entities are affiliated if (directly or indirectly) a percentage of 25% is held or if they are part of an affiliated group. This latter criterion depends on facts and circumstances, but par liamentary proceedings refer to coordinated decisions. If entities are not affiliated but have made an arrangement with a double deduction or a “deduction no inclusion” (see Neutralization of hybrid mismatch benefit) aimed at obtaining a tax benefit (a socalled “structured arrangement”), the anti-hybrid rules also apply. Effective from financial years starting on or after 1 January 2022, the hybrid mismatch rules are also applicable in case of mis matches between a Dutch taxpayer and affiliated individuals, as opposed to affiliated corporate entities only. The scope of the anti-hybrid rules has been broadened with affiliated individuals to align the existing rules with the requirements under ATAD 2. To determine whether an individual or an entity is affiliated to the Dutch taxpayer for purposes of the anti-hybrid rules, the same 25% threshold applies.

Neutralization of hybrid mismatch benefit. A hybrid mismatch may result in a deductible payment while the corresponding income is not taxed at the level of the affiliated entity (“deduction no inclusion”). In case of deduction no inclusion, the primary anti-hybrid rule is to disallow deduction of the payment, neutral izing the previous benefit of the corresponding income not being taxed. If the primary rule does not tackle the mismatch, the sec ondary rule is to tax the corresponding income at the level of the (deemed) Dutch recipient, neutralizing the mismatch.

Similar to situations giving rise to a deduction no inclusion, a double deduction outcome is subject to a primary rule or, if the primary rule does not apply because, for example, the state of residence of the investor does not have anti-hybrid rules, a defensive rule applies. Under the primary rule, if the Netherlands is the state of residence of the investor, the Netherlands denies the de duction. If the Netherlands is the state of residence of the partner ship and the state of residence of the investor has not denied the deduction, the Netherlands will deny the deduction.

For the avoidance of double taxation, the anti-hybrid rules are applied on a pro rata basis. In case of a deduction no inclusion, if part of the income is included at the level of the recipient, the

anti-hybrid rules do not apply to this part of the income. In case of timing differences with respect to income recognition, rules for avoidance of double taxation apply.

In case of deduction no inclusion with respect to a payment by a hybrid entity, a deduction no inclusion with respect to an exemp tion for permanent establishments or a double deduction, the deduction of the payment at the level of the taxpayer is not disal lowed if the deductible expense is set of against income that is included in the taxable basis of both the taxpayer and the affili ated entity (so-called “double income inclusion”).

Hybrid permanent establishments. In case of a hybrid permanent establishment, whereby the Netherlands sees a permanent estab lishment and the other jurisdiction does not regard a permanent establishment to be in existence in its jurisdiction, the Dutch object exemption (exempting income from a permanent establish ment) does not apply to this income.

Imported mismatches. In case a hybrid mismatch in another juris diction is shifted into the Netherlands using a non-hybrid instru ment, the anti-hybrid rules may apply to the non-hybrid instrument in the Netherlands. This could result in a disallowance of a deduc tion in the Netherlands on a non-hybrid instrument if there is a direct connection with the hybrid mismatch with another jurisdic tion and if the mismatch is not resolved under local anti-hybrid legislation.

Transfer-pricing corrections. Transfer-pricing corrections are only in scope of the anti-hybrid rules to the extent that the correc tions are deemed to arise from a hybrid mismatch arrangement. Transfer-pricing mismatches arising from a different application of transfer-pricing principles between jurisdictions do not fall within the scope of the rules; see the above discussion in on the legislation effective for financial years starting on or after 1 January 2022 targeting transfer-pricing mismatches.

Administrative obligations. Dutch corporate income taxpayers must include information in its administration (bookkeeping or business administration) to substantiate whether a payment is considered deductible under, among others, these rules. If such information is not included in its administration, documentation requirements are not met and deductions of payments may not be granted.

F. Treaty withholding tax rates

The rates reflect the lower of the treaty rate and the rate under Dutch domestic law.

Dividends (a) Interest Royalties

Albania

Armenia

Aruba

Dividends (a) Interest Royalties

% % %

Bahrain 0 (c) 0 0

Bangladesh 10 (c) 0 0

Barbados 0 (c) 0 0

Belarus 0/5 (b)(p) 0 0

Belgium 0/5 (c)(g) 0 0

Bonaire, St. Eustatius and Saba

(BES-Islands)

0 (c) 0 0

Brazil 15 0 0

Bulgaria 0/5 (b)(g) 0 0

Canada 5 (b) 0 0

China Mainland 5 (b) 0 0

Croatia 0 (c) 0 0

Curaçao 0/5/15 (c)(bb) 0 0

Czech Republic 0/10 (b)(g) 0 0

Denmark 0 (c)(g) 0 0

Egypt 0 (b) 0 0

Estonia 0/5 (b)(g) 0 0

Ethiopia 5/15 (cc) 0 0

Finland 0 (f)(g) 0 0

France 0/5 (b)(g) 0 0

Georgia 0/5 (c)(o) 0 0

Germany 0/5 (c)(g) 0 0

Ghana 5/10 (c) 0 0 Greece 0/5 (b)(g) 0 0

Hong Kong 0/10 (q) 0 0

Hungary 0/5 (b)(g) 0 0 Iceland 0 (c)(g) 0 0

India 5/10/15 (c)(k) 0 0 Indonesia 5 (b)(gg) 0 0

Ireland 0 (b)(g) 0 0

Israel 5 (b) 0 0

Italy 0/5/10 (c)(g)(ff) 0 0

Japan 0/5 (c)(v) 0 0

Jordan 0/5 (c)(l) 0 0

Kazakhstan 0/5 (c)(v) 0 0

Korea (South) 10 (b) 0 0

Kosovo 0/15 (ii) 0 0

Kuwait 0 (c) 0 0

Latvia 0/5 (b)(g) 0 0

Liechtenstein 0/15 (ii) 0 0

Lithuania 0/5 (b)(g) 0 0

Luxembourg 0/2.5 (b)(g) 0 0 Malaysia 0 (b) 0 0

Malta 0/5 (b)(g) 0 0

Mexico 5 (c) 0 0

Moldova 0/5 (b)(r) 0 0

Morocco 10 (b) 0 0

New Zealand 15 0 0

Nigeria 12.5 (c) 0 0

North Macedonia 0 (c) 0 0

Norway 0 (b)(g) 0 0 Oman 0 (c) 0 0

Pakistan 10 (b) 0 0

Panama 0/15 (e) 0 0

Dividends (a) Interest Royalties

% % %

Philippines 10 (c) 0 0

Poland 0/5 (c)(g) 0 0

Portugal 0/10 (g) 0 0

Qatar 0 (h) 0 0

Romania 0/5 (c)(g) 0 0

Saudi Arabia 5 (c) 0 0

Singapore 0 (b) 0 0

Sint Maarten

0/5/15 (c)(bb) 0 0

Slovak Republic 0/10 (b)(g) 0 0

Slovenia 0/5 (c)(g) 0 0

South Africa 0/5 (c)(dd) 0 0

Spain 0/5 (g)(ee) 0 0

Sri Lanka 10 (b) 0 0

Suriname 7.5 (b) 0 0

Sweden 0 (b)(g) 0 0 Switzerland 0 (c) 0 0

Taiwan 10 0 0 Thailand 5 (b) 0 0

Tunisia 0 (c) 0 0

Turkey 5 (b) 0 0 Uganda 0/5 (z) 0 0 Ukraine 0/5 (d)(r) 0 0

USSR (i) 15 0 0

United Arab Emirates 5 (c) 0 0

United Kingdom 0 (c)(g) 0 0

United States 0/5 (c)(y) 0 0

Uzbekistan 0/5 (b)(x) 0 0 Venezuela 0/10 (b)(w) 0 0 Vietnam 5/7 (b)(n) 0 0

Yugoslavia (j) 5 (b) 0 0

Zambia 5 (b) 0 0 Zimbabwe 10 (b) 0 0

Non-treaty jurisdictions 15 0 0

(a) The dividend withholding tax rates in this table are based on the lowest avail able treaty rates.

(b) The rate is increased to 15% (China Mainland, Czech Republic, Slovak Republic and Venezuela, 10%) if the recipient is not a corporation owning at least 25% of the distributing company.

(c) The rate is increased to 15% (or other rate as indicated below) if the recipient is not a corporation owning at least 10% of the distributing company. Bahrain 10% Kuwait 10% South Africa 10% Ghana 10% Oman 10% United Arab Emirates 10% Japan 10% Saudi Arabia 10%

(d) The treaty withholding rate is increased to 15% if the recipient is not a corpo ration owning at least 20% of the distributing company.

(e) The treaty withholding rate is increased to 15% if the recipient is not a cor poration owning at least 15% of the distributing company and if other condi tions are met.

(f) The treaty withholding rate is increased to 15% if the recipient is not a cor poration owning at least 5% of the distributing company.

(g) A dividend withholding tax exemption is available to EU/EEA member state resident investors (who are not treated as a resident outside the EU/EEA under a tax treaty between the EU/EEA state and a third state) holding an interest in a Dutch dividend distributing entity that would qualify for partici pation exemption benefits. For this purpose, the EEA is limited to the coun tries of Iceland, Liechtenstein and Norway. The withholding tax exemption does not apply if the foreign shareholder fulfills a similar function as a Netherlands fiscal investment company or tax-exempt investment company. No minimum holding period applies.

(h) The treaty withholding rate is increased to 10% if the recipient is not a cor poration owning at least 7.5% of the distributing company.

(i) The former USSR tax treaty continues to apply to Kyrgyzstan, Tajikistan and Turkmenistan.

(j) The former Yugoslavia tax treaty continues to apply to Bosnia and Herzegovina, Kosovo, Montenegro and Serbia.

(k) The treaty withholding rate is 15% but contains a most-favorite-nation clause. The 10% rate is based on the treaty withholding rate with Germany. The 5% rate is based on the treaty withholding rate with Slovenia and requires owner ship of at least 10% of the distributing company.

(l) The 0% rate applies if the recipient is exempt from tax on the dividend.

(m) The 5% rate applies if the recipient has invested at least EUR75,000 in the capital of the distributing company and has an interest of at least 25% in the distributing company.

(n) The 5% rate applies if the beneficial owner of the dividends is a company that holds directly or indirectly at least 50% of the distributing company or has invested more than USD10 million, or the equivalent in local currency, in the distributing company. The 7% rate applies if the beneficial owner of the divi dends is a company that holds directly or indirectly at least 25% but less than 50% of the distributing company and if, under the provisions of the Netherlands Corporate Income Tax Act and future amendments thereto, a company that is a resident of the Netherlands is not charged to Netherlands corporate income tax with respect to dividends received by the company from a company that is a resident of Vietnam.

(o) The 0% rate applies if the beneficial owner of the dividends is a company that holds directly or indirectly at least 50% of the distributing company and has invested more than USD2 million or the equivalent in euro or Georgian cur rency in the capital of the distributing company.

(p) The 0% rate applies if the recipient is a corporation that owns at least 50% of the distributing company and has invested EUR250,000 in the share capital of the distributing company or if the recipient is a corporation owning at least 25% of the shares of the distributing company and the capital of the distribut ing company is guaranteed or insured by the government.

(q) The 0% rate applies if the beneficial owner of the dividends is a company that holds directly at least 10% of the distributing company and if certain other conditions are met. Please consult your Dutch tax advisor for further details.

(r) The 0% rate applies if either of the following circumstances exists:

• The recipient of the dividends owns at least 50% of the distributing com pany, and the recipient has invested at least USD300,000, or the equivalent in local currency, in the capital of the distributing company.

• The investment of the recipient of the dividends in the capital of the com pany paying the dividends is guaranteed or insured by the government of the other contracting state, the central bank of the other contracting state or any agency or instrumentality (including a financial institution) owned or controlled by that government.

(s) The 5% rate applies if the beneficial owner is a company that holds directly 25% of the capital of the company paying the dividends and has invested at least EUR200,000 in the capital of the distributing company.

(t) The 0% rate applies if the beneficial owner is a company that holds directly or indirectly at least 50% of the capital of the distributing company that is wholly or partly divided into shares and if the beneficial owner has invested more than USD250,000 in the capital of the distributing company.

(u) The 0% rate applies if the profits out of which the dividends are paid have been effectively taxed at the normal rate for profits tax and if the dividends are exempt from tax in the hands of the company receiving such dividends.

(v) The 0% rate applies if the beneficial owner is a company that has directly or indirectly owned shares representing at least 50% of the voting power of the distributing company for the six-month period ending on the date on which entitlement to the dividends is determined and if other conditions are met.

(w) The 10% rate applies if, according to the law in force in Venezuela, taxation of the dividends in Venezuela results in a tax burden of less than 10% of the gross amount of the dividends.

(x) The 0% rate applies if under the provisions of the Netherlands Company Tax Act and the future amendments thereto, a company that is a resident of the Netherlands is not charged to Netherlands company tax with respect to divi dends the company receives from a company that is a resident of Uzbekistan.

(y) The 0% rate applies if the recipient is a company that directly owns shares representing 80% or more of the voting power in the payer of the dividends and if other conditions are met. The 5% rate applies if the recipient is a com pany that holds directly at least 10% of the voting power of the payer of the dividends.

(z) The 0% rate applies if the recipient is a company owning at least 50% of the distributing company with respect to investments made, including increases of investments, after the entry into force of this treaty on 10 September 2006. The 5% rate applies if the recipient is a company that owns less than 50% of the distributing company. The competent authorities of the contracting states regulate in an agreement the application of the reduced rates.

(aa) The 5% rate applies if the recipient of the dividend is subject to profit taxa tion at a rate of at least 5.5%.

(bb) Under the new bilateral tax arrangements between the Netherlands and Curaçao and Sint Maarten, the reduced rate of 0% is available if certain re quirements are met. If the conditions are not met, a 15% withholding tax rate should apply. However, under grandfathering rules, a 5% withholding tax rate applies for existing situations until the end of the 2019 financial year.

(cc) These are the rates under a new tax treaty between the Netherlands and Ethiopia, which was signed on 10 August 2012. The effective dates are 1 January 2017 for the Netherlands (including the BES-Islands) and 8 July 2017 for Ethiopia. The 5% rate applies if the beneficial owner of the divi dends holds at least 10% of the capital of the distributing company or is a pension fund.

(dd) The treaty withholding rate is 5% but contains a most-favorite-nation clause. The 0% rate is based on a ruling from a Dutch district court and the Netherlands’ treaties with Kuwait and Sweden. The court ruling provides an opportunity to apply a dividend withholding tax exemption under the Netherlands-South Africa tax treaty if the corporate shareholder holds at least 10% of the capital of the company paying the dividends.

(ee) The 5% treaty withholding tax rate applies if either of the following circum stances exists:

• The receiving company owns 50% or more of the capital of the company paying the dividends.

• The receiving company owns 25% or more of the capital of the company paying the dividends, provided that at least one other company that is a resident of Spain also owns 25% or more of that capital. Otherwise, the rate is increased to 15%.

(ff) The 5% rate applies if the recipient of the dividends owned at least 50% of the distributing company for a period of 12 months preceding the date on which the dividends are declared.

(gg) A 10% rate applies if the beneficial owner is a pension fund that is recog nized and controlled according to the statutory provisions of Indonesia and if the income of the pension fund is generally exempt from tax.

(hh) The 0% rate applies if the beneficial owner is a pension fund.

(ii) The tax treaty provides for full relief of withholding taxes on dividend pay ments to the following:

• Corporate investors (generally including foundations and establishments), provided that they hold at least 10% of the capital of the company paying the dividends throughout a 365-day period

• Recognized pension funds

The tax treaty between the Netherlands and the Russian Federation was terminated, effective from 1 January 2022.

The Netherlands is in continuous negotiations with other juris dictions to conclude new tax treaties or amend existing ones. The Netherlands concluded new tax treaties with Chile and Cyprus during 2021, but the treaties had not yet entered into force as of 1 January 2022. In 2021, the Netherlands signed a protocol to amend the Netherlands-Germany tax treaty and the NetherlandsPoland tax treaty. During 2021, the protocol to amend the Netherlands-Ukraine tax treaty (signed by the Netherlands in 2018) was ratified by Ukraine.

During 2021, the Netherlands reached an official agreement on the text of the tax treaties with Andorra, Bangladesh and Spain as well as on the text of the new tax agreements with Aruba and Curacao. In 2022, the Netherlands is continuing tax treaty nego tiations with Bahrain, Barbados, Belgium, Brazil, Kyrgyzstan, Moldova, Morocco, Mozambique, Portugal, the Russian Federation, Rwanda, Sri Lanka, Suriname, Uganda and the United Arab Emirates.