Decree 2025-219643 addresses business mergers, clarifies the tax treatment of cooperatives, updates loss carry-forward rules, and revises approval procedures.
The Netherlands State Secretary for Finance published Decree 2025-219643 of 21 August 2025 – published in Official Gazette No. 31429 of 24 September 2025 – addressing business mergers, clarifying the tax treatment of cooperatives, updating loss carry-forward rules, and revising approval procedures.
Decree 2025-219643 specifies that confirming the standard merger conditions under Article 14(2) of the Corporate Income Tax Act (CITA) does not equate to meeting the tax avoidance test under Article 14(4). Additionally, the decree eases cooperative mergers and simplifies loss transfers to match the rules applied to other types of reorganisations.
Decree 2025-219643 applies from 25 September 2025 and replaces Decree No. 2022-188681 of 12 August 2022.
The key measures are as follows:
Tax inspector’s confirmation and tax avoidance test compliance
The tax inspector’s confirmation that the standard conditions under article 14(2) of the CITA and the related business mergers decree are met does not guarantee compliance with the tax avoidance test under article 14(4) CITA.
Merger rules and profit deduction restrictions for cooperatives
The inspector’s general approval is no longer required for mergers involving cooperatives. However, if the acquirer is a cooperative with deductible distributed profits (under conditions) and the transferor does not follow this rule, the deduction of “extension profit” is restricted. In such cases, profits from hidden reserves in assets, goodwill, and tax reserves belonging to the transferred business before the transition date are not deductible.
Streamlines loss carry-forward policy
The updated policy simplifies the carry-forward of losses during a business merger by removing the need for prior inspector approval. If conditions are met, the approving scheme applies immediately. The process now aligns with other reorganisation facilities, allowing loss transfer to the acquiring company if: (1) all standard merger conditions are met, and (2) the transfer ends the transferor’s corporate income tax liability.
