The netherlands maintains innovation box while tightening specific interest deduction limitations and reconsidering dividend tax treatment of cooperatives – lexology

On 20 September 2016, as part of the 2017 budget, Dutch government released various tax bills and announced various other tax proposals. 6 gases The government strongly confirms its continued commitment to maintain the attractive features of the Dutch investment climate, for instance by reducing the corporate tax rate to a competitive level in the future, while proactively addressing tax avoidance. Electricity in the 1920s The proposals include the following key changes:

• aligning the Dutch ‘innovation box’ regime, which grants a 5% effective corporate tax rate, with international standards while preserving benefits for the majority of taxpayers;

Although the proposed changes concerning the innovation box and interest deduction limitations may be amended during the course of the legislative process, it is expected that they will take effect as of 1 January 2017. Electricity physics definition The dividend tax amendments have yet to be introduced and are expected to take effect as of 1 January 2018.

The legislative proposals include changes to the current Dutch innovation box regime. Gas after eating In line with the draft proposals of the public internet consultation of May 2016, the legislative proposal ensures that applicability of the regime will remain unchanged for the majority of taxpayers that currently apply the Dutch innovation box. Electricity wikipedia simple english The 5% effective rate remains unchanged and access to the revised innovation box regime is broadened compared to the draft proposals of the internet consultation.

The envisaged legislative changes are the Dutch implementation of Action 5 of the OECD’s BEPS project. Electricity invented timeline Action 5 is aimed at combating harmful tax practices and focuses on improving transparency and exchange of information surrounding application of preferential regimes. P gasket 300tdi Action 5 requires a certain level of activity (substance) for application of any preferential regime. Gas jet This also affects the Dutch innovation box regime, for which Action 5 prescribes the so-called ‘Nexus Approach’.

The legislative proposals provide for a broad range of qualifying (partially new) intangible assets. Electricity notes physics At the same time, certain limitations compared to the current regime are to be newly introduced. Hp gas online login The proposed innovation box regime will be founded on ‘qualifying intangible assets’ and ‘qualifying income’.

SMEs are – in this context – defined as taxpayers (i) deriving benefits from qualifying intangible assets of less than € 37,500,000 in the respective financial year and the four preceding financial years combined, and (ii) also having a net turnover of less than € 250,000,000 in the respective financial year and the four preceding financial years combined. Grade 6 electricity If the taxpayer is part of a group of companies the second test is applied to the turnover of the total group.

For SMEs, the intangibles that qualify for the revised innovation box regime are self-developed intangible assets from research & development (R&D) activities for which so-called ‘R&D wage tax certificates’ have been obtained from the competent Dutch governmental agency.

With respect to taxpayers that are not SMEs, a cumulative condition applies for qualifying intangible assets. Electricity word search pdf In addition to having obtained R&D wage tax certificates in respect of these intangible assets, the intangible assets should also qualify as one of the following:

• exclusive licenses to use an intangible asset qualifying under (i), (ii), (iii), (iv) or (vi) in a certain way, in a certain area or for a certain period of time.

Qualifying income is determined per qualifying intangible asset or per coherent group of qualifying intangible assets (‘tracking-and-tracing’). Electricity generation If it is not possible to apply the tracking-and-tracing method, the method for determining the qualifying income will be established by taking into account the nature of the business enterprise and the R&D activities of the taxpayer. Gas in oil lawn mower The main methods used under the current innovation box regime to determine qualifying income will remain applicable: this particularly includes the commonly used profit split method.

Any qualifying income determined on the basis of the above can be limited if, and to the extent that, a taxpayer has outsourced part of its R&D-activities to a company within its group. Ortega y gasset obras completas If R&D is outsourced to group companies, the limitation to the qualifying income is based on the proportion of qualifying R&D expenses incurred by the taxpayer in relation to the overall R&D expenses incurred by the taxpayer in respect of the relevant intangible asset. Static electricity in water In this respect qualifying R&D expenses are described as the total of R&D expenses minus the R&D expenses related to the outsourcing of R&D to group companies. Electricity and circuits class 6 cbse These qualifying expenses may be multiplied with 1.3, allowing for limited outsourcing of R&D in the group.

The proposed rules for the Dutch innovation box regime are envisaged to enter into force as of 1 January 2017 and are to apply to financial years commencing on or after 1 January 2017. Mp electricity bill payment online jabalpur However, a number of grandfathering rules apply:

• A grandfathering rule will be applicable to qualifying intangible assets which have been developed before 30 June 2016. Gas 47 cents The current Dutch innovation box regime in principle continues to apply to these assets. Electricity and circuits physics This grandfathering is applicable up to and including the last financial year ending before 1 July 2021.

• A grandfathering rule will apply to intangible assets developed after 30 June 2016 but before 1 January 2017. Gas vs electric water heater savings If for these assets only a patent or plant breeder’s right is obtained (no R&D wage tax certificates), these assets still qualify for the revised innovation box regime.

Taxpayers currently applying the innovation box should assess whether they can continue to apply the innovation box to intangible assets developed after 30 June 2016.

The anti-base erosion rule (art. Gas vs electric oven efficiency 10a CITA) denies deduction of interest payments on loans from related parties that have a connection with certain ‘tainted’ transactions involving related parties. Gas in dogs symptoms The proposed change broadens the concept of ‘related party’, which currently generally requires an equity stake of 1/3 or more of a single entity or individual. Electricity bill saudi electricity company Under the proposed rules, entities that form part of a collaborating group that together owns 1/3 or more in the taxpayer will be deemed to be related. Static electricity zap According to the explanatory notes, an example of a collaborating group is a group of unrelated funds with one common general partner acting on behalf of all funds and coordinating the joint investment.

The proposed rules would apply to all interest costs arising as from 1 January 2017 without any grandfathering rules for currently existing loans or past transactions. Electricity per kwh Structures in which the anti-base erosion rule currently does not apply because payments are made to, or transactions took place with, unrelated parties therefore need to be reviewed to assess the risk of a collaborating group.

The acquisition holding rule (art. Gas city indiana newspaper 15ad CITA) denies deduction of interest payments made by acquisition holdings to related and unrelated parties on loans used for the acquisition of an entity that is included in a fiscal unity with the acquisition holding. Gas 0095 The rule’s aim is to prevent offsetting interest costs of the acquisition holding against the profits of the acquired entity. Gas finder rochester ny This provision does not apply, among other exceptions, to non-excessive debt financed acquisitions (maximum of 60% of acquisition costs in the first year, declining with 5% per year after inclusion in fiscal unity to 25% in the eighth year). Electricity questions and answers physics The first proposed change relates to this exception and combats structuring in which the goal is to start a new eight year period through a share transaction between related parties (under the broadened definition of the anti-base erosion rule; see above), followed by inclusion in a new fiscal unity.

The second change relates to structures in which interest expenses are pushed down to the acquired entity. Gas and water company Technically, under the current rules, deduction of such pushed down interest expenses would effectively not be limited. Electricity cost per kwh south africa It is proposed to expand the scope of the acquisition holding rule to such pushed down interest expenses.

The third proposed change relates to the existing grandfathering rules, under which the acquisition holding rule does not apply to debt in relation to acquired companies that were included in a fiscal unity with the acquisition holding before 15 November 2011. Electricity for dummies amazon The current grandfathering rules also apply to fiscal unities (with acquisition debt) entered into before 15 November 2011 that are broken up and included in a subsequent fiscal unity with a new parent company. Gas youtube It is proposed that this grandfathering is withdrawn in case a fiscal unity that was formed before 15 November 2011 is included in another fiscal unity with a different parent company on or after 1 January 2017. P gasol stats In most cases, this will be relevant for the structuring of acquisitions on or after 1 January 2017.

All changes to the acquisition holding rule would apply as from 1 January 2017 and – except for the third proposed change – also affect existing situations. 76 gas station credit card login A review of current structures is therefore advised to assess the possible impact of the proposed changes.

In a letter addressed to Dutch parliament, the State Secretary of Finance outlines the envisaged alignment of the dividend tax treatment of cooperatives and NVs/BVs in international structures. Gas out game directions The letter makes a distinction between ‘holding’ cooperatives and cooperatives that are engaged in broader activities. Gas prices going up june 2016 It appears that only the dividend tax treatment of ‘holding’ cooperatives will be changed. 1 unit electricity cost in india As a result of the proposed alignment, profit distributions by ‘holding’ cooperatives to ≥5% members would, in principle, become subject to dividend tax, similar to NVs/BVs. Wikipedia electricity generation At the same time, to improve withholding tax free flows of funds, a broader dividend tax exemption would become available for distributions by cooperatives and NVs/BVs to parent companies resident in tax treaty countries in structures involving a business enterprise, unless the structure is considered to be abusive. Gas jobs crna The new rules are envisaged to enter into force ultimately 1 January 2018. 5 gases in the atmosphere As this is not yet a legislative proposal, but only an announcement, we will keep you posted on further developments.