On 16 December 2008, the Dutch government announced an update to its plans to, among other things, simplify the tax rules on interest deductions.
Although very little information was published, the government indicated that it anticipates that the new rules will include the introduction of:
- an exemption for interest received from group companies, whereby interest paid to group companies will no longer be deductible, or, alternatively, a so-called mandatory group interest box (with lower rates); and
- a limitation on the deductibility of interest paid to third parties if the taxpayer has participations in group entities.
The increased revenues are expected to be applied towards a reduction of the corporate tax burden. Further details on the proposed rules are expected to be announced in the first half of 2009.