An advance tax ruling (ATR), like an advance tax agreements (APA), is a binding agreement between the Dutch tax (and customs) authorities and the taxpayer on the application of Dutch tax law. Such rulings ensure a certainty in advance of the acceptability of a certain scenario. The Netherlands has a modern and reliable system for obtaining advance tax and pricing rulings. The current practice is the result of a restructuring in 2001, where the practice was brought in line with OECD principles. In this respect, a number of resolutions were issued (and some updated in 2004), describing the Dutch ruling practice.
An ATR under the Dutch ruling practice can cover for instance the following three topics:
Applicability for intermediate holding companies in international situations and for ultimate holding companies (if none of the subsidiaries of the holding company have activities in the Netherlands).
In case of hybrid financing instruments and/or hybrid entities.
Whether a Dutch permanent establishment of a foreign enterprise exists.
In general, ATRs may be requested and concluded (in the form of an agreement with the Dutch tax authorities) for a period of four years.
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