The State Secretary of Finance provided a letter to Dutch parliament in which he indicated that an internet consultation has been opened for a draft bill on 10^th July 2017. The draft bill has been formulating in order to implement the first EU Anti-Tax Avoidance Directive (ATAD 1)  which was approved by the EU member states in June 2016, an EU directive that provides for a minimum harmonization against tax avoidance. The ATAD measures include an earning clear rule, exit taxation, Controlled Foreign Companies (CFC) rule and a general anti-abuse rule (GAAR). Consultation on these preliminary proposals will be open until 27 August 2017 and a final proposal for the further juridical procedure is expected during the first quarter of 2018. The effective date of the proposal is 1^st January 2019.

Interest deduction rules: According to the draft bill, the (excessive) interest expenses are only deductible up until 30% of the corrected Dutch taxable profit, or tax available EBITDA. However, the non-deductible interest costs that exceed 30% of EBITDA is deductible up to a maximum amount of EUR 3 million. The proposal does not yet make a choice whether a worldwide group ratio escape rule will be implemented, and, if so, whether this will be an equity escape rule or an earnings-based worldwide group ratio rule.

CFC rules: The CFC rule targets taxpayers that directly or indirectly hold more than 50% of capital or voting rights or are entitled to receive more than 50% of the profits of low-taxed foreign entities and low-taxed PEs. The ATAD provides two different options for EU Member States to include CFC rules (model A and model B). Based on Model A, passive income (e.g. interest, royalties and dividend income) of a CFC will be included as current income in the taxable base of a domestic company, unless the CFC is involved in substantial economic activities. Based on model B the income of a CFC will only be included in the taxable income of the Dutch parent company in case of artificial allocation of profits to a CFC.

The GAAR will not be executed separately, based on the view that the abuse of law-doctrine as developed in Dutch case law achieves the same goal.