NETHERLANDS LAW AND PRACTICE Contributed by: Friederike Henke, Ingrid Cools, Philip ter Burg, IJsbrand Uljée, Suzan van de Kam and Epke Spijkerman, BUREN
between “associated enterprises”, head offices and their permanent establishments or between two or more permanent establishments of an entity and mismatches under a so-called ”struc - tured arrangement” are neutralised. A hybrid mismatch is generally present if there is a dou - ble deduction of costs or a deduction of costs without inclusion of the corresponding benefit. These rules apply for the following hybrid mis - matches. • Hybrid entity mismatches – an entity is treated as non-transparent in one jurisdiction and transparent in another jurisdiction. • Hybrid financial instruments – an instrument that includes debt and equity is treated as nontransparent in one jurisdiction and trans - parent in another jurisdiction. • Hybrid financial transfers – an arrangement to transfer a financial instrument causes a hybrid mismatch. • Imported hybrid mismatches – a hybrid mis - match situation between parties in non-EU jurisdictions is shifted to an EU member state through the use of a non-hybrid instrument. • Hybrid PEs – a permanent establishment is treated differently between jurisdictions as regards the presence or attribution of profit to business activities in the jurisdictions. • Dual resident mismatch – a payment made by a dual resident company may be deductible in multiple jurisdictions. A separate anti-mismatch rule applies to “reversed hybrid situations”, which concern enti - ties that are treated as transparent in the jurisdic - tion of incorporation or registration, and that are treated as non-transparent in the jurisdictions of their participants. Reverse hybrid entities are subject to corporate income tax in the Nether - lands. Furthermore, a reverse hybrid entity may
also be subject to dividend withholding tax and conditional withholding tax. Taxpayers are required to have information in their administration substantiating whether or not any hybrid mismatch rules are met. If such information is not present, the tax inspector could request the provision of such documenta - tion and the taxpayer would have the burden of proof that no hybrid situation would be present. 5.8 Tariffs The Netherlands is part of the EU customs union. This implies that the Dutch tariff regime is equal to the tariff regimes of other EU member states and that no tariffs are imposed on intra EU transactions. The applicable rates on import of goods with non-EU origin differ depending on the kind of goods and their origination. The EU has a huge number of trade agreements in place with third countries and regions. A considerable number of trade agreements are under renego - tiation. The European Commission initially launched counter measures affecting different products in response to the introduction of new tariffs by the United States. On 14 April 2025, the counter measures have been suspended for 90 days to allow space for renegotiations.
6. Competition Law 6.1 Merger Control Notification
Mergers can be subject to either EU or Dutch merger control rules. The rules in the Dutch Competition Act are based on and essentially resemble the EU competition rules. The European Commission must be notified of any merger with an EU dimension prior to its
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