NETHERLANDS LAW AND PRACTICE Contributed by: Friederike Henke, Ingrid Cools, Philip ter Burg, IJsbrand Uljée, Suzan van de Kam and Epke Spijkerman, BUREN
The investment incentive for environment improving assets provides for tax deductions in connection with the acquisition of one or more new environment-improving assets. The deduc - tion generally amounts to 40% of the amount of the investment, which should be included on a list published by the RVO, and requires the issu - ance of a notification from the RVO. Under conditions similar to those of the invest - ment incentive for environment-improving assets, it is possible to apply the random depre - ciation regime to environment-improving assets or energy-improving assets. Under this regime, taxpayers can randomly depreciate 75% of the investment made in the qualifying asset. Some investments are excluded from the appli - cation of the above-mentioned incentives. 5.4 Tax Consolidation Fiscal Unity for Dutch Corporate Income Tax Purposes Companies that are part of a “fiscal unity” for Dutch corporate income tax purposes may file a consolidated tax return, and are taxed on a consolidated basis as if they were just one com - pany. As a result, transactions between compa - nies belonging to the fiscal unity are, in principle, ignored and not subject to taxation on profits or gains. However, for purposes of certain anti-abuse rules (eg, for the anti-base erosion rules included in Article 10a of the Dutch Corporate Income Tax Act 1969), transactions between entities within a fiscal unity are considered. The Dutch fiscal unity rules include other anti- abuse rules, which can be triggered by the for - mation or dissolution of a fiscal unity, for exam - ple. Companies belonging to the fiscal unity are
jointly and severally liable for payments of cor - porate income tax over the period of the fiscal unity. Parent companies and their subsidiaries can, upon request, form fiscal unities if a number of requirements are met, including the following. • Ownership requirement – the parent company must hold the economic and legal ownership of at least 95% of the shares in the nomi - nal paid-up capital of its subsidiary, which provides entitlement to at least 95% of the statutory voting rights in that subsidiary and to at least 95% of the profits, and represents at least 95% of the capital of the subsidiary. • Residency requirement – the applying com - panies should be residents of the Netherlands for tax treaty purposes. In addition to the above, a parent company can form a fiscal unity with an indirectly held subsidi - ary if both companies are tax residents of the Netherlands and the intermediate company (or companies) between the parent company and the indirectly held subsidiary resides in anoth - er EU or EEA member state. Furthermore, two Dutch tax-resident subsidiaries can form a fiscal unity if their joint parent resides in another EU or EEA member state. A new tax consolidation system is under discussion already for a long time but does not seem to have much traction. Fiscal Unity for Dutch VAT Purposes A VAT group can be created by two or more per - sons established within an EU member state, who, while legally independent, are closely bound to each other by financial ties (ie, more than 50% shareholding), organisational ties (ie, central management) and economic ties (ie, same or related activities or suppliers). A VAT group is treated as one VAT entrepreneur.
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