ATAD2 (Anti Tax Avoidance Directive 2) has been implemented in Dutch tax law as per 1 January 2020 and neutralizes hybrid mismatches that bring about double deduction of deduction without inclusion between affiliated entities.
ATAD2 also introduces important additional documentation requirements for the 2020 corporate income tax return and following years. The documentation requirements enable the Dutch tax authorities to review if and how the taxpayer has calculated a correction in its tax return based on these ATAD2 regulations. Dutch tax law does not explicitly mention the (minimum) documentation requirements but the Dutch government has indicated that the following information will be relevant.
- Worldwide organizational chart of the group;
- An assessment of the qualification of financial instruments, hybrid entities or permanent establishments, including foreign tax returns and tax assessments;
- An opinion of an expert in the area of foreign tax law.
Please note that the documentation requirement also apply if no correction to the taxable profit is considered necessary based on ATAD2.
KC Legal can assist you in the determination and preparation of the required documentation under ATAD2.