The Netherlands brings entity tax classification rules in line with international standards

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The current Dutch tax classification rules for Dutch and foreign entities (such as partnerships) are quite unique and therefore deviate from international standards. In particular, this has caused ‘hybrid entity mismatches’ in an international context. For this reason, the Dutch government has (finally) proposed to overhaul these tax classification rules with certain legislative proposals. These proposals are open for consultation until 26 April 2021. The new rules, if enacted, should enter into force as per 1 January 2022.

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