Budget Day 2015: Implementation of the Parent-Subsidiary Directive Amendment Act

The legislative proposal (Implementation of the Parent-Subsidiary Directive Amendment Act 2015) includes the implementation of two amendments in the Parent-Subsidiary Directive (PSD) which are aimed against:

  1. Mismatches in the tax treatment of interests or substitute payments for providing loans by a company to another (affiliated) company (hybrid loans). This resulted in the EU-Directive 2014/86.
  2. Abuse of the PSD. This resulted in EU-Directive 2015/121, whereby a general anti-abuse provision was introduced in the PSD.

The Act should become effective on 1 January 2016.

The legislative change has an impact on hybrid loans and hybrid entities, the application of the participation exemption, dividend stripping, the obligation to withhold dividend withholding tax of cooperative associations and international holding structures which show insufficient economic reality.

Do you have any questions about the impact of the legislative change on your affairs? Please contact one of our tax consultants.