In its judgment of April 25, 2025, the Dutch Supreme Court ruled that the relocation of a Dutch holding company to Curaçao did not constitute abuse of anti-abuse rules applicable under Dutch corporate income tax law.
The case involved a managing director and majority shareholder who moved to Curaçao in 2007. As a result of this, the mind and management of its formally Dutch BV also moved to Curaçao. BVs were involved in a private equity transaction and received substantial dividend payments in 2016 following the sale of a Dutch operating company.
The Dutch Tax Authority sought to levy corporate income tax under an anti-abuse rule. However, both the District Court and the Court of Appeal in The Hague ruled that the dividends were not taxable in the Netherlands. The Supreme Court has now upheld these rulings.
The key reasoning that there was no abuse deemed present as the migration in 2011 was considered to be motivated by private reasons and therefore, was not primarily tax-driven. Furthermore, the structure predated a 2016 tax treaty change (BRNC) after which dividends were more favourably taxed, and the holding company retained independent control over the dividend proceeds, did not pass them through, and was not a mere conduit. Therefore, the arrangement reflected valid commercial reality and lacked the artificiality characteristic of tax abuse.
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May 2025
