Netherlands: Landmark court case on the treatment of inter-company loans

Resource Information

The work Netherlands: Landmark court case on the treatment of inter-company loans represents a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation. This resource is a combination of several types including: Work, Language Material, Continuing Resources.

Label

Netherlands: Landmark court case on the treatment of inter-company loans

Creator

• Breggen, M.E.P. van der

Subject

• intercompany loan
• documentation requirements
• arm's length principle
• case law
• transfer pricing

Language

eng

Summary

The Dutch tax authorities frequently take the position that if a borrower - on a stand alone basis - would not have been able to enter into a third party loan, the same inter-company loan can be re-characterised into capital on the basis of paragraph 1.65 of the OECD guidelines. Interest paid by a borrower on such loan is therefore not deductible. However, a Dutch Supreme Court case of 25 November 2011 makes clear that this position taken by the Dutch tax authorities may not be correct. Robust documentation remains the best approach to withstanding tax authority attack. This article looks at the decision and explains

Citation source

In: Transfer pricing international journal. - London. - Vol. 13 (2012),

Geographic coverage

• European Union
• Europe

Language note

English