Dutch tax treatment of acquisition finance costs

Anton Louwinger is a Tax Advisor in Lovells’ International Tax Practice based in our Amsterdam office.

In an effort to strengthen the Dutch investment climate, in May of this year the Dutch State Secretary of Finance sent long awaited draft legislation for the 2007 corporate tax reform (the “Bill”) to the Dutch parliament. Anton Lou-winger reviews the Dutch thin capitalisation rules and the specific tax measures that aim to combat perceived abusive transactions in the context of corporate acquisitions, looking at the rules that are likely to apply as of 1 January 2007 when the reforms are proposed to come into effect.