On 21 December 2009, the Dutch State Secretary of Finance published a new Decree with respect to the classification of foreign entities under Dutch law. This 2009 Decree replaces a previous decree dated 18 December 2004. The 2009 Decree is an update of the criteria that are used to classify a foreign entity as transparent or non-transparent for Dutch tax purposes. These classification rules are applicable for Dutch income tax, corporate income tax, and dividend withholding tax purposes and apply to all entities except for foundations, associations, mutual funds, trusts, and comparable entities. In this article, the author provides a summary of the classification rules as they applied under the 2004 Decree. He provides an outline of the revised classification rules under the 2009 Decree and gives his comments and observations. He puts the new classification rules in the context of classification conflicts and gives a recommendation in this respect. The author summarizes his most important conclusions.
Intertax