Dutch government publishes draft regulations for new international tax ruling practice

On 23 April 2019, the Dutch Undersecretary of Finance published a draft Decree containing regulations for the previously announced new Dutch international tax ruling practice. The draft Decree contains a definition of international tax rulings. The Decree states that not only summaries will be published of all international tax rulings issued but also of ruling requests denied. The Undersecretary provides example ruling summaries. The Decree furthermore reconfirms that rulings shall no longer be issued if the Dutch entity requesting the ruling belongs to a corporate group that does not have sufficient economic nexus with the Netherlands, or if the overriding motive behind the transactions covered by the ruling request is a saving of Dutch or non-Dutch taxation, or on direct transactions with entities residing in countries on the EU list of non-cooperative countries or in low-tax countries.

In a letter to Dutch Parliament of last 22 November, the Undersecretary had already described the outlines of the new Dutch international tax ruling practice following a review of that practice. The new ruling practice is aimed to increase the quality of the rulings and make the practice more robust. See our previous November newsflash on this development. The draft regulations now published contain the formal rules governing the new ruling practice.

The draft regulations apply to tax rulings covering the explanation of Dutch domestic rules on the levy Dutch corporate income tax and Dutch dividend withholding tax in an international context as well as to tax rulings covering the application of bilateral tax treaties or other regulations for the avoidance of double taxation to the levy of Dutch corporate income tax and Dutch dividend withholding tax (referred to as ‘international tax rulings’).

The Undersecretary still aims to introduce the new ruling practice with effect from 1 July 2019. Parliamentary debate on the draft regulations has been scheduled for 4 June 2019, which may lead to modifications to the draft regulations.
The new regulations are centred around three themes: transparency, issuing process and ruling content.



In order to address a perceived demand in society for more public information about international tax rulings, the Undersecretary proposes to increase transparency by introducing the following regulations:

  • The Dutch Tax Authorities will publish an anonymous summary of each international tax ruling, which – the Undersecretary assures – cannot be traced back to the individual taxpayer. The summaries will contain a short overview of the facts and circumstances and – insofar relevant – of the most important conclusions from transfer pricing reports and analyses of tax rules and regulations that have been confirmed by the tax ruling.


  • The draft regulations contain example ruling summaries on a number of topics.


  • Summaries will also be published of cases where an international tax ruling was requested but has ultimately been denied. In those cases, the summaries will explain the reason why the tax ruling request was denied.


  • As an effort to better ensure consistency in terms of transparency and content of tax rulings, the co-ordination of international tax ruling practice will be further centralized by introducing one body that will be involved in the sign-off of international tax rulings covering a defined range of topics. This body will be called the College for International Fiscal Affairs.


  • Foreign investors considering investment into the Netherlands continue to be serviced by the Dutch Foreign Investment Desk. As currently, this Desk will continue to be entitled to provide advance certainty to foreign investors on a wide range of tax topics including Dutch corporate income tax, Dutch dividend withholding tax, Dutch personal income tax, Dutch wage tax and Dutch VAT. The Desk also functions as a first port-of-call for import duties and excise taxes. As part of the new tax ruling practice, the Dutch Foreign Investment Desk will be integrated into the new College for International Fiscal Affairs.



In his fight against international tax avoidance, the Dutch Undersecretary will take a number of measures that are aimed to deny certainty in advance to MNE’s with only limited presence in the Netherlands:

  • International tax rulings will only be issued if the entity requesting the ruling is part of a corporate group that performs operational business activities in the Netherlands (economic nexus). Additionally, operational activities need to be performed in the Netherlands for risk and account of the requesting entity, while the group has to have a sufficient number of relevant personnel on the ground in the Netherlands to perform these activities, both in relation to the activities performed in the Netherlands and in relation to the total number of relevant personnel at group level. The activities performed by the personnel in the Netherlands need to be commensurate with the function of the requesting entity.


  • As an example of insufficient economic nexus, the Undersecretary mentions an active operational distribution entity in the Netherlands also performing interest or royalty conduit activities without having the appropriate operational substance for such conduit activities. In such case the taxpayer is eligible to conclude a tax ruling on the distribution activities but not on the conduit activities.


  • No international tax ruling will be issued if the overriding motive behind the transactions covered in the ruling request is a saving of Dutch or non-Dutch taxation.


  • As an example , the Undersecretary mentions interest-free loans on which a Dutch taxpayer seeks confirmation of an arm’s-length notional interest deduction while it is clear that no corresponding interest income is picked-up in the loan creditor’s country of residence.


  • No international tax rulings will be issued on direct transactions with entities residing in countries listed on the EU list of non-cooperative countries or in low-tax countries (i.e. by current Dutch standards countries applying a statutory tax rate of less than 9%).


  • As currently, all international tax rulings will henceforth be agreed for a maximum term of 5 years. In exceptional cases, e.g. when long-term contracts are involved, that term can be extended to a maximum of 10 years.


  • International tax rulings will be issued in fixed formats.


The above regulations only limit the willingness of the Dutch Tax Authorities to conclude tax rulings. The Dutch Undersecretary of Finance has made it clear that providing advance certainty to taxpayers is and will remain one of the key elements in the Dutch Tax Authorities’ supervision. Also, and as the Undersecretary acknowledges, actual Dutch tax law does not change as a result of these regulations. MNE’s might therefore still be willing to set-up international tax-saving structures through the Netherlands, albeit without certainty in advance from the Dutch Tax Authorities.

We will continue to inform you on any further developments on this topic before the Dutch Tax Authorities will adopt this new tax ruling policy with effect of 1 July 2019.

Should you require more information at this time, please do not hesitate to contact Joost van den Berg or Frank van Nus.

For more information, please contact:

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