Netherlands: Interest expenses non-deductible when debt acquisition abuses law (Supreme Court decision)
This decision upholds the Amsterdam Court of Appeals’ earlier judgment.
The Dutch Supreme Court has reaffirmed that interest expenses on acquisition debt are non-deductible when the underlying loan constitutes an abuse of law, even if not explicitly denied under the fraud provision of Section 10a Corporate Income Tax Act.
This decision upholds the Amsterdam Court of Appeals’ earlier judgment and further clarifies the interplay between Section 10a CITA 1969—addressing related-party financing for acquisitions—and the “fraus legis” doctrine. The decision is significant for practitioners advising on cross-border acquisitions and intra-group financing structures, as it underscores the importance of substance and anti-abuse considerations in Dutch corporate tax law.
Read a 2025 report prepared by the KPMG member firm in the Netherlands
For more information, contact a KPMG tax professional in the Netherlands:
Michael van Gijlswijk | vangijlswijk.michael@kpmg.com