Tax Treaty Case Law around the Globe 2025
1. Aufl. 2026
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1. Introduction
The Dutch Supreme Court ruled in a case on 17 May 2024 concerning the deductibility, for Dutch corporate income tax (CIT) purposes, of costs for issuing convertible bonds (Obligations Remboursale en Actions (ORAs)) and shares issued as remuneration for acquiring a Dutch target company by a French company (a Société Anonyme that was later converted to a Societas Europaea, hereafter referred to as X SE) with a permanent establishment (PE) in the Netherlands.
The questions brought before the Dutch Supreme Court concerned:
the Dutch tax qualification of the ORAs as either debt or equity;
whether, for Dutch tax purposes, the issuance costs should be considered as being related to the existence of the legal entity X SE itself;
whether Art. 7(3) of the Netherlands-France double tax convention (DTC) from 1973 requires the issuance costs to be tax deductible in the Netherlands;
whether a denial of deduction by the Netherlands violates the non-discrimination provision of Art. 25(4) of the Netherlands-France DTC; and finally
whether a denial of deduction violates the freedom of establishment under European Union (EU) law (Art. 49 of the Treaty on the Functioning of the European Union...