Cautious optimism would appear to be the phrase to sum up the Netherlands this year, with the market incipiently returning to health."The M&A market was good, with pipeline projects coming through. During 2012 the transactions have been less and smaller, ...
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Cautious optimism would appear to be the phrase to sum up the Netherlands this year, with the market incipiently returning to health.
"The M&A market was good, with pipeline projects coming through. During 2012 the transactions have been less and smaller, but we've retained a good hit rate," said Jeroen Smits, at Stibbe, while another says of FDI: "Well, overall there's been a lot of turbulence in the market. As a trading nation – unlike Germany with its industry – we rely on outside factors more."
With the TMT and energy sectors reportedly active, things are looking up, though the Europe-wide trend of more stringent tax authorities is replicated here.
"A significant trend is the shift of policy in the tax administration. There are a lot more tax audits now. This is across Europe too," said Deloitte's Richard Roovers, while another added: "Tax authorities are more and more, I hesitate to use the word, but 'aggressive'."
What is different is the open attitude of the Dutch authorities, who are not as pugnacious with regards to court cases as some of their European counterparts. The horizontal monitoring system is testament to this.
"It's a cultural thing. Benelux authorities see it as better to cooperate as it guarantees more revenue. You can lose out and then that sets bad law," says Smits, adding: "The authorities are scrutinising structures more, but overall they remain fairly cooperative."
In line with the trend in Luxembourg, transfer pricing is a hot topic in the Netherlands: "TP is more and more a key area of taxation. While documentation has been for a long time a core piece of the practice, in the last few years the main focus has been the design and sophisticated planning and lately controversy. Additionally, valuation, especially related to IP planning, has become a main driver of growth," says Antonio Russo at Baker & McKenzie.
A couple of changes that will affect tax are on the way. "The company law will be changed as of October 1, making it much more flexible," one corporate adviser explained. "There will be shares without votes and shares without value but which carry a vote. This is a novelty."
Debt pushdown rules are also expected to be tweaked and practitioners confirm that the VAT rate will go up to 21% from 19% in October.
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