New fiscal guidelines on the treatment of costs related to the acquisition or disposal of shares

The costs related to the acquisition or disposal of shares are covered by the Dutch participation exemption and are therefore non-deductible from a Dutch corporate income tax perspective. In a recent judgement of the Dutch Supreme Court provides new guidelines on how to determine which costs qualify as costs related to the acquisition or disposal of shares: ‘acquisition and sales costs.

New guidelines:
Based on this judgement: 
• Costs are qualified as acquisition/disposal costs if there is a direct and causal link with an acquisition or disposal of shares. This is the case when costs would not have occurred without the acquisition or sale of the participation.
• The acquisition/disposal costs relate to both in- and external costs. As such, costs incurred (i.e. time spent) by own employees in regard to an acquisition or disposal are also non-deductible.
• During the acquisition or disposal process related costs need to be “activated” on the balance sheet. 
• If an acquisition or disposal is unsuccessful, the costs in this respect do no longer relate to an acquisition/disposal and no longer need to be activated and become deductible. However, if the intention to dispose the shares remains, the related costs remain non-deductible (activated on the balance sheet). With a following acquisition or disposal, it should be determined which costs would not have been incurred had the initial acquisition or disposal not occurred. These costs are then deductible, all other costs out of the first and following phases are to be activated. 

Wesselman Due Diligence-Team
Although the Dutch Supreme Court has given new guidelines on the qualification of acquisition and disposal costs, the assessment which costs are deductible and which costs need to be activated in practice strongly depends on the specific facts and circumstances. The specialists of the Wesselman Due Diligence team can assist you with the review which costs are to be qualified as costs related to the acquisition or disposal of shares.

Onze specialisten

Ruud van Poppel

Belastingadviseur | Specialist Internationaal

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Ruud van Poppel

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