Advance tax ruling

General

ATRs and APAs are binding agreements between the Dutch tax (and customs) authorities and the taxpayer on the application of Dutch tax law. Such rulings ensure a certainty in advance of the acceptability of a certain scenario. The Netherlands has a modern and reliable system for obtaining advance tax and pricing rulings. The current practice is the result of a restructuring in 2001, where the practice was brought in line with OECD principles. In this respect, a number of resolutions were issued (and some updated in 2004), describing the Dutch ruling practice.

An ATR under the Dutch ruling practice can cover for instance the following three topics:

  1. Participation exemption
    Applicability for intermediate holding companies in international situations and for ultimate holding companies (if none of the subsidiaries of the holding company have activities in the Netherlands).
  2. International structures
    In case of hybrid financing instruments and/or hybrid entities.
  3. Permanent establishment
    Whether a Dutch permanent establishment of a foreign enterprise exists.

 

In general, ATRs may be requested and concluded (in the form of an agreement with the Dutch tax authorities) for a period of four years.