It is likely that the number of international tax rulings granted in the Netherlands will reduce significantly as a result of a new international tax ruling policy ("New ITR Policy"), a draft of which was released on 23 April 2019. Also, existing rulings will not be eligible for a renewal upon the expiration of their term if they do not meet the requirements of the New ITR Policy. 

The New ITR Policy, which is expected to become effective without major amendments for rulings issued on or after 1 July 2019, represents the next step by the Dutch government in its efforts to try to shed the Netherlands of its reputation for being a jurisdiction that facilitates tax base erosion through aggressive tax planning structures. Under the New ITR Policy, obtaining a new tax ruling or extending an existing one will become significantly more difficult than it is today.  This is because a tax ruling will only be granted if the taxpayer has so-called "economic nexus" with the Netherlands and if saving Dutch or foreign tax is not the sole or decisive purpose for entering into the transaction for which a ruling is sought. These are much higher standards than are applicable under the current tax ruling policy. 

Today, a taxpayer is eligible to apply for a tax ruling if it meets certain minimum substance requirements, such as having at least 50 percent Dutch resident directors, holding board meetings in the Netherlands, etc. These requirements are fairly easy to meet. The absence of a sole or decisive tax avoidance motive is not a requirement for obtaining a ruling under current ruling policy. 

The Dutch Under Secretary of Finance has stated in parliament that a structure in which a deduction is claimed in the Netherlands without a corresponding pick-up abroad will not be eligible for a tax ruling under the New ITR Policy, because it fails the motive test. This effectively shuts the door for new tax rulings and extensions of existing tax rulings for structures involving interest free loans, payments to reverse hybrids (such as CV/BV structures) and informal capital structures in general. With regard to the latter, it remains to be seen whether informal capital that arises in projects involving significant capital investments will still be eligible for a tax ruling in the future. 

In addition to the above, no rulings will be issued if the entities involved are in low-taxed jurisdictions (as designated by the Dutch Ministry of Finance).  Anonymized summaries of rulings will be published, as well as summaries of ruling applications that have been denied. Taxpayers considering obtaining a tax ruling in the Netherlands should take into account the New ITR Policy. Taxpayers that operate under an existing tax ruling will have to consider whether their tax ruling can be extended under the New ITR Policy.  If not, they should consider alternatives, including continuing without a ruling, reorganizing the structure with a view to coming within the scope of the New ITR Policy, or, as a last resort, exiting the Netherlands.