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Netherlands: Clarification Criteria Allocation of Shares to Permanent Establishment

Double tax treaties are important in cross-border planning.  Multi-national companies use treaties and holding company structures to reduce their worldwide effective tax rate, including a reduction in withholding tax on repatriation.

Treaties address permanent establishments PE "which determines if a foreign company is exempt from host country taxation."

A new Decree by the Dutch Ministry of Finance clarifies the criteria that are used for the allocation of shares to a permanent establishment.  This allocation is important for the application of the participation exemption, exclusion of dividend withholding tax and the group taxation regime.  The Decree also indicates when the tax authorities will not issue an advance tax ruling (ATR) with respect to the allocation of shares to a PE.

For further information please contact international tax expert Corney Versteden at HLB member firm HLB Van Daal & Partners.

Mr. Corney P.J.M. Versteden
HLB Van Daal & Partners
Prof. Asserweg 8
5144 NC Waalwijk, Netherlands

Phone: + 31 416 34 03 45
E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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HLB Van Daal & Partners is a member of HLB International. As a firm of professional accountants and business advisers, HLB Van Daal & Partners Accountants & Belastingadviseurs is committed to providing clients with an exceptional standard of services and expertise that will add value to their businesses and contribute to their growth. HLB Van Daal & Partners Accountants & Belastingadviseurs has a vision for your future, a plan to help you thrive in the new economy, and a passion for success.

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