Netherlands: Interest on loan from Belgium coordination center is non-deductible (Supreme Court decision)
Tax motives were the basis for providing the group loan via the financing entity.
The Dutch Supreme Court on January 16, 2026, issued a final judgment concerning the deduction of interest on a loan provided by a Belgium group financing entity used for an acquisition.
The case involved a loan structured through a group financing entity in Belgium, and the Dutch Supreme Court had previously sought a preliminary ruling from the Court of Justice of the European Union (CJEU) regarding the interpretation of EU law.
The final judgment, issued with consideration of the CJEU's answers, concluded that tax motives were the basis for providing the group loan via the financing entity. As a result, the interest was deemed non-deductible under Section 10a of the Corporate Income Tax Act 1969 (CITA 1969). Additionally, the Supreme Court confirmed that the rebuttal provision in Section 10a CITA 1969 aligns with EU law regarding the business-motivation test.
Read a January 2026 report prepared by the KPMG member firm in the Netherlands