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Anti-avoidance framework

Regulation

What legislative and regulatory initiatives has the government taken to combat tax avoidance in your jurisdiction?

Article 10a of the Corporate Income Tax Act sets out an anti-abuse rule regarding interest paid to associated entities. Where tainted legal acts are concluded (eg, dividend distribution, capital contribution or (partial) acquisition by the taxpayer) which are financed with debt from associated entities, the interest can be deducted only if the legal act and the financing are commercially motivated. Article 13l (participation interest) and Article 15ad (acquisition interest) of the Corporate Income Tax Act also contain interest deduction limitations.

To what extent does your jurisdiction follow the OECD Action Plan on Base Erosion and Profit Shifting?

The Netherlands adopts the measures under the Base Erosion and Profit Shifting Action Plans when international consensus about such measures is reached. The Netherlands also complies with EU anti-tax avoidance directives. The Netherlands advocates coordinated and binding international changes at multilateral and EU levels.

Is there a legal distinction between aggressive tax planning and tax avoidance?

Measures against tax avoidance should in principle be codified in tax law, while aggressive tax planning can be relevant to the way that tax authorities cooperate with a company. ‘Aggressive tax planning’ is not legally defined.

Penalties

What penalties are imposed for non-compliance with anti-avoidance provisions?

Non-compliance with anti-avoidance provisions can lead to increased scrutiny from the tax authorities, as they act responsively with regard to their supervisory duties. The tax authorities try to cooperate with taxpayers, but taxpayer non-compliance can lead to different treatment. This is described in a published guideline on supervision of bigger enterprises.  

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