Nearly two years after the Amsterdam Court of Appeals ruled, on the basis of three preliminary rulings rendered by the Court of Justice of the European Union, that certain aspects of the Dutch corporate income tax fiscal unity regime were not in line with EU law, the last major step has been taken to rectify this: on November 29, 2016 the Upper House approved the Bill on the Fiscal Unity Amendment Act.

This bill means that the extension of the fiscal unity regime will now also be formally incorporated into law, after it had already been laid down in supplementary policy statements as a response to the above case law. The bill covers, in particular, two basic situations:

  1. the situation where a parent company established in the Netherlands holds the shares in a sub-subsidiary established in the Netherlands via an intermediate holding company that is established in another EU/EEA Member State (a so-called ‘Papillon’ fiscal unity).
  2. the situation where the shares in two or more sister companies established in the Netherlands are held by a joint parent company established in the EU/EEA (a so-called ‘sister’ fiscal unity).

There are all sorts of variations on these two situations in which, under certain conditions, companies can be included in the fiscal unity. This bill also repairs the various opportunities for double loss set-off that could arise as a result of extending the possibility to form a fiscal unity.

We would also like to point out that proceedings are currently pending before the Supreme Court, concerning a request for a fiscal unity that was filed for numerous sister companies established in the Netherlands with a joint parent company established outside the European Union. 

The Act will take effect after its publication in the Bulletin of Acts and Decrees.