Dutch tax law provides several facilities that allow corporate restructurings to take place without triggering personal income tax or corporate income tax. These facilities can also be applied in cross border situations, although they require careful planning and compliance with specific conditions. This article outlines the main structuring options available in the Netherlands, and highlights important considerations for international restructurings.
Choosing the initial structure: PE or separate legal entity
When starting business activities abroad, companies must decide whether to operate through a permanent establishment (PE) or to incorporate a separate legal entity.
A PE is relatively easy to establish, but it brings significant administrative obligations. While allocating revenue to a PE is generally straightforward, allocating costs can be challenging and gives rise to early transfer pricing considerations.
