Dutch fiscal unity rules in breach of EU law

On June 12, 2014, the European Court of Justice (ECJ) ruled that the Dutch fiscal unity rules are in breach of European Union (EU) law because they do not allow a fiscal unity between a Dutch parent company and a Dutch sub-subsidiary held through an EU/European Economic Area (EEA) intermediate subsidiary, or a fiscal unity between two Dutch 'sister' companies held through a joint EU/EEA parent company.

After this decision of the ECJ, such fiscal unities should now be possible. Multinational companies based inside and outside the EU with Dutch subsidiaries should determine whether this decision may provide an opportunity for them. For example, when losses are trapped within one reporting group, this decision of the ECJ could potentially provide for new opportunities to set off these losses within such reporting group with profits of another reporting group.

If you have any clients or prospects for whom this decision could be interesting or if you have any questions, please contact your Baker Tilly Berk advisor.