In recent years, the Dutch tax environment for mergers and acquisitions that cross borders has seen significant changes. These changes affect the major choices that buyers must make. This involves deciding whether to purchase shares or assets and the acquisition vehicle is used. This article will discuss these changes in a brief manner, based on current tax law, up to and including Tax Plan 2021, which is primarily in effect since the year 2019.
The most common way for a party to acquire control over a Netherlands-incorporated company is through a public bid for all issued shares. This is usually a share for share swap, but can also involve securities (e.g. bonds and convertible instruments). In rare instances the tender offer can be made for securities representing less than 30 percent of the voting rights in the target (e.g. America Movil’s bid for KPN, in 2012; and Pon Holdings in its bid for Accell in November 2018.
A statutory merger is an alternative way to acquire control of a Dutch-incorporated company. This involves the surviving company getting all assets and liabilities from one or more of the disappearing companies while shareholders https://rietvelddejong.nl/onehub-ansarada-firmex-top-vdr-providers-in-the-netherlands/ who do not agree with the merger are granted appraisal rights, which permit them to quit in exchange for cash compensation. the post-bid cash out merger of Wright Medical Group into a Stryker subsidiary in 2020). Statutory mergers can be domestic or cross-border within the European Economic Area (EEA) but not between a Netherlands-incorporated company and a foreign company (e.g. Delaware corporation).
The acquiring company must be a Dutch public liability company (NV) based in the Netherlands or, in the event of misuse, a hybrid entity as defined in a Dutch/EEA Tax Treaty. Moreover, the WHT – equal to the highest CIT – will apply to interest and royalty payments made between an affiliated entity located in the Netherlands and a subsidiary in the Netherlands unless the payment is attributable a permanent establishment in the country that is acquiring.