{"id":25083,"date":"2023-10-05T14:58:11","date_gmt":"2023-10-05T12:58:11","guid":{"rendered":"https:\/\/hvk-stevens.com\/?p=25083"},"modified":"2023-10-05T14:55:56","modified_gmt":"2023-10-05T12:55:56","slug":"international-aspects-of-budget-day-tax-plan-2024","status":"publish","type":"post","link":"https:\/\/hvk-stevens.com\/en\/international-aspects-of-budget-day-tax-plan-2024\/","title":{"rendered":"International aspects of budget day – Tax Plan 2024"},"content":{"rendered":"

On 19 September 2023, the Dutch government published the budget for the year 2024, including several legislative tax proposals for the years 2024 and 2025 (“the Tax Plan”). In this newsletter we highlight the most relevant tax measures from an international perspective. \u00a0\u00a0<\/strong><\/p>\n

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Introduction<\/h3>\n

From an international perspective, the most relevant tax measures include changes to the classification rules for Dutch limited partnerships, foreign legal entities comparable to Dutch legal entities and Dutch FGR’s. These changes should enter into force per 1 January 2025. Furthermore, the conditional withholding tax on dividends will enter into force per 1 January 2024.<\/p>\n

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Current classification limited partnerships<\/h3>\n

Under current Dutch classification rules, a limited partnership is generally considered to be transparent for Dutch tax purposes if for the accession or substitution of a limited partner, unanimous consent of all limited partners and the general partner is required. Therefore, to qualify as transparent for Dutch tax purposes, the limited partnership agreement (“LPA”) should include a specific clause that prescribes such unanimous consent from all partners. As the LPA’s of foreign limited partnerships generally do not contain such clause, foreign limited partnerships are often considered non-transparent for Dutch tax purposes while considered transparent in other countries. Hence, this results in so-called hybrid mismatches.<\/p>\n

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New classification limited partnerships<\/h3>\n

From 1 January 2025, all Dutch limited partnerships (i.e. CV’s) are deemed to be transparent for Dutch corporate income tax (“CIT”) purposes, regardless of what is stipulated in the LPA regarding the entry and replacement of limited partners. Therefore, the distinction between the open CV (subject to corporate income tax) and the closed CV (transparent for tax purposes) will disappear. Open CV’s will therefore no longer be subject to CIT as of 1 January 2025. The proposal also introduces a so-called allocation provision for income tax purposes, on the basis of which the assets and liabilities as well as the income and expenses, are allocated to the \u00a0partners of the CV. The allocation provision applies mutatis mutandis to partners who are liable for CIT. This ensures that the income of a CV can be taxed directly with the partners.<\/p>\n

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Since the open CV as a legal form does not cease to exist upon termination of its CIT liability, the proposed transitional law regulates (by \ufb01ction) that – for CIT purposes – an existing open CV (non-transparent), at the moment immediately prior to the termination of its tax liability, i.e. on 1 January 2025, is deemed to have transferred all of its assets to its partners at fair market value. At that moment, the open CV is also deemed to have ceased to make taxable pro\ufb01ts in the Netherlands. As a consequence, such open CV should file a mandatory final CIT settlement.<\/p>\n

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Transitional law<\/em><\/strong><\/p>\n

To postpone direct taxation as a result of the above measures, the proposal contains transitional law that will apply from 1 January \u00a02024. The transitional law consists of a number of facilities, including:<\/p>\n