Netherlands ATAD implementation - Consultation document

On 10 July, the Netherlands government published a consultation document with draft legislation for the implementation of the first EU Anti-Tax Avoidance Directive (ATAD).

The ATAD contains rules on (i) limitation of interest deductions (earnings stripping), (ii) exit taxation, (iii) controlled foreign corporations (CFC) , (iv) hybrid mismatches, and (v) a general anti-abuse rule (GAAR).

The consultation document sets out draft legislation in respect of the earnings stripping rule, exit taxation, and CFCs (points (i), (ii) and (iii) above). The government has taken the position that the current Netherlands abuse of law doctrine (fraus legis) already meets the requirements set out in the ATAD for a GAAR (point (v) above). Draft legislation for rules on hybrid mismatches (point (iv) above) will be published separately.