Doing Business in the Netherlands 2012 - American Chamber of ...

Doing Business in the Netherlands 2012
As temporary measure in 2009, 2010 and 2011, a taxpayer can opt to
extend the carry back period to three years, whereby the carry forward
of losses shall be limited to six years instead of nine. Such extension
of the carry back period is limited to EUR10,000,000 per (fiscal) year.
The amount of tax losses that may be carried back or forward has to
be determined by the Dutch tax authorities after the taxpayer files its
annual corporate income tax return. Certain anti-abuse provisions
restrict loss compensation if (i) at least 30% of the ultimate
shareholders in a company have changed as compared to the oldest
year in which the losses were incurred and (ii) the change of control
occurred after the company terminated or largely reduced its former
business activities.
As from January 2011, the abovementioned change-of-control
provision which aims to restrict the trade in so-called “losscompanies”
and “profit-companies” has been amended. The current
anti-abuse provision only disallows the carry forward of losses that
were realized in the years prior to the (financial) year in which the
change of control occurred. Losses can however still be utilized – and
hence the trade in loss companies is still beneficial – if such losses are
suffered in the same year in which the change of control occurs.
Similarly a possibility exists in relation to “profit-companies,” i.e.,
companies realize a significant profit in a certain year (e.g., because
they sell all their business assets with hidden reserves).
Such profit companies may, under the current legislation, be
transferred to a party which is able to create and “inject” losses for tax
purposes in the profit company within the same year in order to
“sweep away” the realized profits.
The change-of-control provision has been amended so that the
compensation of losses of loss-companies and the offsetting of profits
of profit-companies is also disallowed in change-of-control situations
within the same year in which the change of control takes place.
Baker & McKenzie 187