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Risk Advisory
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Mastering digitalisation together
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Operational Advisory
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Deal Advisory
We’ll advise you on national and international transactions
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Valuation & economic and dispute advisory
We’ll value your business fairly and realistically
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Financial Advisory
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Tax for businesses
Because your business – national or international – deserves better tax advice.
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Financial services tax – for banks, asset managers and insurance companies
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Employment law
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Commercial & distribution
Making purchasing and distribution legally water-tight.
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Inheritance and succession
Don’t leave the future to chance.
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Financial Services | Legal
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Business legal
Doing business successfully by optimally structuring companies
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Real estate law
We cover everything on the real estate sector, the hotel industry, and the law governing construction and architects, condominium ownership, and letting and renting.
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IT, IP and data protection
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Your one-stop service provider focusing on M&A transactions
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Sustainability strategy
Laying the cornerstone for sustainability.
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Sustainability management
Managing the change to sustainability.
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Sustainability reporting
Communicating sustainability performance and ensuring compliance.
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Integrating sustainability into investment decisions.
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International business
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Entering the German market
Your reliable partners.
The most important amendment to content in the protocol is an adjustment to the definition of permanent establishment. The DTA ascribes a right of taxation to the state in which a permanent establishment is located, but also states exceptional circumstances in which the term ‘permanent establishment’ is not met. Until now, these exceptional circumstances were not tied to any other conditions. In future, all exceptional circumstances will be subject to the condition that they have to be preparatory activities or ancillary activities.
This tightening of the rules particularly has an effect on international sales structures. For example, up till now a warehouse in the Netherlands belonging to a German company did not constitute a permanent establishment in the Netherlands. In future, this will only be the case if the storage activities are merely preparatory or ancillary activities.
Furthermore, the protocol creates in the DTA with the Netherlands a minimum holding period for the distribution of dividends. According to this, in addition to having to hold a 10 percent minimum stake, a reduction in withholding tax to 5 percent is now only possible if a minimum holding period of 365 days is observed before the dividend is distributed. The rules concerning the parent-subsidiary directive are not affected.
The protocol also changes the definition of “real estate company”. According to the DTA, the right to tax the proceeds of the sale of real estate companies is attributed to the state in which the properties are situated. Until now, “real estate company” was defined based on the proportion of the value of the properties to total assets on the transfer date. Under the revised version, it is sufficient if the entire proportion of value required is exceeded at any point during the 365 days before the sale.
A principal purpose test (PPT) clause was also included in the DTA. This clause ensures that an advantage is not granted on the basis of the treaty if the only purpose of the transaction is to gain tax advantages.
Practical note
Act now: In cross-border situations with the Netherlands, the amended rules must be observed from January 2023. In particular, business dealings in the Netherlands that do not currently constitute a permanent establishment should be checked to see whether the planned amendments now lead to tax obligations there.