The Dutch tax authorities (DTA) have published
a knowledge group (KG) position (KG
Position), which clarifies that the participation
exemption should apply to the full capital gain upon the disposal
of a participation, regardless of whether the tax basis of that
participation was impacted by the potential application of the
transfer pricing mismatch rules. This KG Position is beneficial to
taxpayers. KG Positions constitute policy of the DTA, meaning that
they are binding on tax inspectors. Taxpayers can rely on KG
Positions as of their publication date, i.e., 17 March 2025 for
situations covered by this KG Position.
Background
As of 1 January 2022, the Netherlands has anti-abuse legislation
against double non-taxation resulting from transfer pricing
mismatches. In the case of transfers of assets and liabilities
through contributions, distributions, mergers and demergers, the
Dutch corporate income tax (CIT) basis for the
recipient is at maximum (for assets) or at
