New EU proposals – impact on Dutch hybride structure previous message

New EU proposals – impact on Dutch hybride structure

A package of three proposals for major corporate tax reforms in the European Union where presented by the European Commission on 25 October 2016. One of the proposals includes an amendment that will have a significant impact on the use of Dutch CVs in international tax structuring.

Use of a Dutch CV

In the graphic below, a typical example of the use of a Dutch CV is included. In essence an Opco as well as a BV can make a deduction of the relevant financial flow (interest, royalty), however the same financial flow is effectively not subject to tax at the level of a CV or a BV.


The new measure will result in the non-deductibility of the financial flow at the level of the EU member state in order to prevent tax deduction without any inclusion of income.

Other measures

The proposal is in general aiming to limit tax planning as a result of mismatches in legislation between countries. Not only does this new proposal extend the scope to structures in which the Dutch CV is often involved (i.e. hybrid entity mismatch planning), but to other tax planning structure in relation to the following mismatches:

  • Hybrid financial instrument mismatches
  • Hybrid transfers
  • Hybrid permanent establishment mismatches
  • Imported mismatches
  • Dual resident mismatches

Implementation and way forward

If the new revised ‘hybrid mismatch’ proposal would be adopted, the EU member states need to implement the outcome not later than the first of January 2019. Although the proposal has not yet been adopted, it is important to review whether your organisation will be impacted by this proposal. Furthermore we can determine whether alternative solutions are available.

Our international team of tax specialists can assist you with this assessment.  If you have any questions, please contact Guido van Asperen (+31 615041623 or

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