We have extensive practical experience regarding corporate migration tax planning and we are naturally happy to advice you on this subject.
Very often existing foreign companies (i.e. their effective management or corporate seat) are migrated to (immigration) or from (emigration) the Netherlands.
The migration of a foreign company can in most cases be effectuated by transferring the place of effective day to day management of the company.
Corporate immigration to the Netherlands
In case of migration to the Netherlands in particular the following Netherlands (tax) issues particularly warrant close attention:
- based on the Netherlands legal system a company incorporated under foreign law will as a general rule stay governed by the rules of corporate law of the country of incorporation (statutory seat);
- as the statutory seat of the corporation stays in the country of incorporation, the company may stay subject to taxes in that country (dual residency issues). Usually one of the numerous Dutch double tax treaties would avoid double taxation but this needs to be checked.
- the Netherlands corporate income tax and dividend tax law provide for step-up in basis in most but not in all cases, especially Dutch dividend withholding tax may become due upon future distribution of existing reserves.
Corporate emigration from the Netherlands
In case of (partial of full) migration from the Netherlands, the following Dutch tax issues particularly need to be reviewed:
- for Dutch corporate tax a Netherlands incorporated company (B.V. or N.V.) is generally always regarded as a resident taxable entity, unless a tax treaty would mitigate this for treaty purposes. It may therefore be important that the new state of residence of the company has concluded a favourable tax treaty with the Netherlands.
- the migration as such does not lead to the levy of Dutch dividend withholding tax, but the Dutch dividend withholding tax claim remains in existence. However most tax treaties concluded by the Netherlands prevents such post-emigration taxation.
- when migrating abroad, the Netherlands resident company must revalue all its assets and liabilities to market value; the revaluation gain or loss is subject to the normal Dutch corporate income tax rates, be it that the gain/loss on shares may qualify for the participation exemption.