In recent years, the Dutch tax environment for mergers and acquisitions with a foreign partner has undergone major changes. These changes will affect essential decisions a potential buyer has to make. These include whether to purchase assets or shares, as well as what will be the acquisition vehicle. This article discusses these developments briefly, with reference to the current tax legislation, up to and including Tax Plan 2021. This mainly came into effect in 2019.
The most common way for a party to acquire control over a Netherlands-incorporated company is through a public bid for all issued shares. It is typically an exchange of shares for shares, but can also involve securities. convertible instruments and bonds are examples of securities that can be traded. In rare instances the offer could be made for securities that account for less than 30% of the voting rights within the target. America Movil’s bid for KPN, in 2012 and Pon Holdings the bid for Accell in November 2018.
A statutory merger is an alternative method to gain control over a Dutch-incorporated company. This involves the surviving firm being legally able to acquire all assets and liabilities from one or more disappearing firms while shareholders who do not agree with the merger have appraisal rights that permit the company to withdraw in exchange for cash compensation. The post-bid cash out merger between Wright Medical Group with a Stryker subordinate in 2020. Statutory mergers can be domestic or cross-border within the European Economic Area (EEA) but not between a Netherlands-incorporated company and a foreign company (e.g. Delaware corporation).
The the acquiring company must be a Dutch public limited liability company (NV) that is based in the Netherlands or, in abusive circumstances it could be a hybrid entity as per an agreement between the Dutch and EEA. In addition, the WHT equivalent to rietvelddejong nl valuable advice here the highest CIT will be applied to interest and royalty payments made between an affiliated entity in the Netherlands and a subsidiary in the Netherlands unless the payments are caused by a permanent institution in the country that is acquiring.