Netherlands: Unrealized losses may be forfeited following a change in shareholders (Supreme Court decision)
Supreme Court held that change-of-control rules of Section 20a CITA 1969 also apply to unrealized losses.
The Dutch Supreme Court on September 11, 2026, held that the change-of-control rules of Section 20a CITA 1969 also apply to unrealized losses existing at the time of a change in shareholders, and thus such unrealized losses may no longer be deductible following a change in shareholders.
Under the change-of-control rules of Section 20a CITA 1969, tax losses cannot be offset against profits if a taxpayer’s ultimate shareholding changes to a significant extent (at least 30%), unless certain exceptions apply. A long-standing question was whether those rules apply only to losses that have already been realized for tax purposes at the time of the change in shareholders, or whether losses that had not yet been recognized for tax purposes (“unrealized losses”) also fall within the scope of the rules. In a brief and concise decision, the Supreme Court held, in line with case law under a prior version of the change-of-control rules, that unrealized losses may also fall within the scope of Section 20a CITA 1969.
KPMG observation
The Supreme Court did not resolve all issues concerning Section 20a CITA 1969. It remains unclear, for example, how unrealized losses affect the exceptions under which losses may still be available for offset (i.e., the investment test and the activities test). For those tests, the year in which the losses were incurred is relevant, whereas for unrealized losses it may be uncertain when they were incurred. The Supreme Court also did not provide further guidance on which facts and circumstances need to be considered when determining whether an unrealized loss existed before the change of control.
Read a September 2026 report prepared by the KPMG member firm in the Netherlands