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

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Commerce. An EEIG with official address in the Netherlands is considered a legal entity under Dutch law. A regulation has been published with respect to the taxation of EEIGs. The following general rules apply: a) EEIGs are “tax-transparent” and therefore not subject to Dutch corporate income tax. The profits resulting from the activities of an EEIG are taxable only in the hands of its members. Any distributions made are not subject to Dutch dividend withholding tax. Tax transparency does not apply to other taxes (e.g., wage tax). b) Foreign members will be subject to tax in the Netherlands only if the business in the Netherlands is run via a permanent establishment or a permanent representative. c) The EEIG itself does not have access to the Dutch tax treaty network as it does not qualify as a Dutch resident. 18.18.2 Societas Europaea As of 2004, it is possible to incorporate an European company or Societas Europaea (“SE”). The SE has legal personality and is in many respects comparable to a Dutch NV or BV. For Dutch tax purposes, a SE that has its registered office in the Netherlands is treated similarly to a Dutch NV (a public limited liability company). This means that SEs are subject to the same taxes as Dutch NVs and that SEs have access to the same tax facilities available to NVs, such as the fiscal unity facility and the participation exemption. SEs are also eligible for the benefits of the EU Parent-Subsidiary Directive, the EU Interest and Royalties Directive and the EU Merger Directive. There are four ways to incorporate a SE: a) Through a legal merger between two companies based in different EU Member States. 202 Baker & McKenzie
Doing Business in the Netherlands 2012 b) Through incorporation of a SE as a holding company for two companies based in two different EU Member States or with subsidiaries in two different EU Member States. c) Through incorporation of a SE as a subsidiary of: (i) two companies based in two different EU Member States; or (ii) an SE. d) Through a change of corporation form from an eligible company (e.g., an NV) to an SE. Although there are rules restricting the way a SE may be incorporated, anyone can become a shareholder. A SE is able to transfer its registered office from one EU Member State to another. In addition, a group that has companies throughout the EU can now create a uniform management structure by forming a SE, since SEs may opt for a onetier or two-tier board system. Another relevant practical aspect is that the formation of SEs makes international legal mergers possible between companies incorporated under the laws of an EU Member State. 18.19 EU Interest and Royalty Directive The EU Interest and Royalty Directive took effect on 1 January 2004. Referring to the Directive, companies that are directly related and are able to meet certain conditions are no longer subject to withholding tax on interest and royalty payments. Furthermore, EU Member States have the option not to apply the Directive if companies do not meet a direct shareholders’ test for an uninterrupted period of two years. The Directive is effective for the EU Member States. Since the Netherlands does not levy a withholding tax on interest and royalty payments, the effects of the Directive on Dutch legislation is limited. Baker & McKenzie 203
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Editorial Contributions Robert van
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Innovative ways to inform you Doing
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1 The Netherlands Doing Business in
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Steady-Course Policy Doing Business
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2 Legal Forms of Doing Business Doi
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2.3 Branch versus Subsidiary Doing
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4 The Subsidiary 4.1 Incorporation
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8 Commercial Contracts 8.1 General
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9 Real Estate 9.1 Ownership Doing B
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9.7 Leases Doing Business in the Ne
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10.5 The European Economic Area Doi
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12 Telecommunications 12.1 Market S
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12.9 Net Neutrality Doing Business
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14 Labor Law 14.1 Term Doing Busine
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14.4 Works Council Doing Business i
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24.13 Arbitration Doing Business in
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Tax Corporate & International Tax H
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