Netherlands: Lower House of Parliament passes bill on excessive borrowing from a taxpayer's own companies

Threshold amount of €700,000

Lower House of Parliament passes bill

The Lower House of Parliament on 13 September 2022 passed a bill on excessive borrowing from a taxpayer’s own companies. The bill would tax holders of a substantial interest in a company who borrow more than €700,000 from the company on the excess as income from a substantial interest—effective 1 January 2023 and taking into account the level of debt as of 31 December 2023.

The threshold amount of €700,000 would apply to the substantial interest holders and their partners jointly and not to each of them individually. Borrowings by people related to the substantial interest holder (e.g., children or parents) would also be taken into account. In addition, loans from multiple companies in which a substantial interest is directly or indirectly held would be added together. However, home acquisition debt would be excluded, and no dividend tax would be withheld on the deemed ordinary benefit.

Transitional rules have been proposed but are confined in scope. 

KPMG observation

The bill would also affect loans that Dutch companies have provided to foreign companies with a substantial interest, and which are non-resident taxpayers for corporate income tax purposes.

Read a September 2022 report prepared by the KPMG member firm in the Netherlands



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