New CFC measure against tax evasion through foreign countries
Effective date: 1 January 2022
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What changes?
A new measure against tax evasion will be introduced. With this measure it will be less appealing to shift profits to countries that levy fewer taxes.
From 1 January 2022, the order in which you offset foreign profit taxes will be fixed. You are no longer allowed to choose which part of your taxes will offset in the current year and which part you want to pass on to the coming years. This measure is an addition to the Controlled Foreign Company (CFC) measure. If you have multiple foreign partnerships or branches, the Dutch Tax and Customs Administration (Belastingdienst) will offset the foreign taxes for each CFC separately.
For whom?
- companies that are active in more than 1 country and that pay taxes abroad
When?
This change in legislation enters into force on 1 January 2022.