On July 2, 2019, the Dutch government published the legislative
proposal implementing the EU Anti-Tax Avoidance Directive II (ATAD
II) that was adopted on May 29, 2017. The ATAD II mandates EU
Member States to implement rules that target hybrid mismatches by
January 1, 2020 (specific sections by January 1, 2022).
With the implementation of ATAD II, the Dutch government will
revoke the 2005 Decree, which allows taxpayers to claim certain tax
treaty benefits under the United States - Netherlands tax treaty
(US-NL Treaty) for CV/BV structures. dividend distributions from a
Dutch entity - which is held by a reverse hybrid CV - to the US,
will become subject to Dutch dividend withholding tax, unless a
domestic withholding tax exemption is applies.
