The Netherlands has issued a new decree clarifying the application of ATAD interest deduction limitations, effective from 30 July 2025.
The Netherlands State Secretary for Finance has published Decree no. 2025-17107 of 16 July 2025, in Official Gazette no. 25392 of 29 July 2025, clarifying the application of the interest deduction limitations outlined in the Anti-Tax Avoidance Directive (2016/1164) (ATAD).
The Decree applies from 30 July 2025 and Decree no. 2023-22492 of 24 November 2023.
The Anti-Tax Avoidance Directive (Council Directive (EU) 2016/1164) contains legally binding anti-abuse measures which all Member States are obliged to apply to counter common forms of aggressive tax planning. The Directive creates a minimum level of protection against corporate tax avoidance in the EU while ensuring a fairer and more stable environment for businesses.
The main clarifications are summarised below:
Loan treated like an agreement
A loan-equivalent agreement also arises when a party is liable to pay statutory interest due to the late settlement of a financial obligation.
Bonds issued below or above par value
When a bond is issued for more or less than its face value, that difference (called a premium or discount) is spread out over the bond’s term. This is done through methods like straight-line or compelling interest. In such cases, the amortisation or accrual is considered interest under Article 15b(3) of the Corporate Income Tax Act (CITA) and, combined with contractual interest, forms the effective interest rate for the interest deduction limitation.
Loan transfer with different market rates
If the market interest rate differs from the nominal rate during a receivable or liability transfer, the acquirer faces a premium or discount, treated similarly to bond issuance at a premium or discount.
Value loss when transferring loans
Transferring receivables or payables at a nominal interest rate different from the market rate may cause a loss for the transferor, but this loss does not impact the interest deduction limitation.
Embedded derivatives in extendible loans
An extendible loan may include an embedded derivative, giving the lender the option to extend the loan at a new interest rate. This derivative can be separately valued at fair value for commercial and tax purposes. Any changes in its value are reflected in the interest balance and fall under the interest deduction limitation.
Extendible loan
This is a type of loan where the lender gets to decide whether to extend the loan for another period, possibly with a new interest rate. For tax purposes, it’s treated like a regular loan when calculating how much interest can be deducted.
Statutory extension of interest rate concept: Results on hedging instruments
In Article 15b, paragraph 6, parts b through e, of the Corporate Income Tax Act 1969, certain costs and results relating to loans or related legal transactions are designated as interest expenses. Such compensation, therefore, does not, in principle, fall under the economic interest concept of Article 15b, paragraph 2, of the Corporate Income Tax Act 1969, but is included in the interest balance in the case of a loan.
Liquidation loss
A liquidation loss is not treated as a write-down or reversal for interest deduction limits and is excluded from the adjusted profit calculation.
Tonnage regulation
Profit determined using the tonnage tax scheme is included in the adjusted profit. Because of the fixed nature of the tonnage tax scheme, this interest is not taken into account when determining the profit earned in a year. Furthermore, the tonnage tax scheme does not affect the minimum deduction allowance of EUR 1 million under the Corporate Income Tax Act 1969. This minimum deduction allowance is not (partially) allocated to the profit determined based on the tonnage tax scheme.
Per-Element approach and interest deduction limitation
When determining the adjusted profit, profits from group companies established outside the Netherlands are not taken into account, even if these companies could be part of a fiscal unity with a taxpayer if they were established in the Netherlands. This is not contrary to the European law’s freedom of establishment.
