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European Commission - Press release

Taxation: Commission requests The Netherlands to amend discriminatory tax rules on fiscal unities

Brussels, 16 June 2011 – The European Commission has formally requested The Netherlands to amend its tax legislation on fiscal unities (i.e. calculation of income tax of a group of companies on a consolidated basis). Current Dutch legislation does not allow two Dutch subsidiary companies held by a foreign parent company to form a fiscal unity between themselves. In practice this means that companies which have their parent company in another Member State cannot benefit from the fiscal unity regime, which is contrary to EU rules. The fiscal unity regime allows companies to file a single tax return for a group of companies, thus facilitating tax compliance and allowing compensation of profits and losses.

The Commission considers that current Dutch legislation on fiscal unities is contrary to the freedom of establishment provided in Articles 49 and 54 of the Treaty on the Functioning of the European Union and Articles 31 and 34 of the European Economic Area Agreement. The Commission's request takes the form of a reasoned opinion (the second step of EU infringement proceedings). In the absence of a satisfactory response within two months, the Commission may refer The Netherlands to the EU's Court of Justice.


The Dutch Corporation Tax Law allows companies which form a group to be taxed as a fiscal unity. It means that profits and losses of the group can be offset and intra-group transactions are eliminated. Article 15.3.c of the Dutch Corporation Tax Law requires all the companies of the fiscal unity to be resident in The Netherlands. This rule excludes fiscal unities between two Dutch subsidiary companies in the same group, held by a foreign parent company, which is contrary to EU law.

The Commission does not see any possible justification for these restrictions.

There is clear case-law from the EU Court concerning such discriminatory tax regimes. In the Papillon Case (C-418/07), the Court ruled that a French parent company and a French subsubsidiary company should be able to form a fiscal unity, in spite of the intermediate subsidiary being situated in another Member State.

For press releases issued on infringement proceedings in the area of taxation or customs see:

For more information on EU infringement procedures, see MEMO/11/408.

For the most up-to-date general information on the infringement proceedings initiated against Member States, see:


David Boublil (+32 2 296 55 73)

Maud Scelo (+32 2 298 15 21)

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