Lower Chamber adopts Bill on the Fiscal Unity Emergency Repair Act

Lower Chamber adopts Bill on the Fiscal Unity Emergency Repair Act

13 February 2019

On February 12, 2019, the bill on the Fiscal Unity Emergency Repair Act (Wet spoedreparatie fiscale eenheid) was adopted by the Lower House. The measures in the bill mean that some Sections of the Corporate Income Tax Act (‘CITA’) and the Dividend Withholding Tax Act (‘DWTA’) will have to be applied as if there is no fiscal unity.

Based on the bill, the legislation will apply with retroactive effect to January 1, 2018. Taxpayers with a financial year corresponding to a calendar year will thus in principle be confronted with the emergency repair as of the 2018 financial year. To accommodate small and medium-sized enterprises, transitional rules will apply for the period through to December 31, 2018 for cases where the interest for a 12-month period does not exceed EUR 100,000 per fiscal unity and a number of additional conditions are met. Dutch companies that hold at least a 95% interest in a foreign subsidiary established in the EU/EEA can, in principle, also take advantage of the transitional rules.