You are here:
06 March 2019 / news

Dutch Parliament approves MLI ratification bill

On 5 March 2019, the Upper House (Eerste Kamer) of Dutch Parliament approved the Multilateral Instrument (“MLI”) ratification bill.

Reform of Belgian insolvency law as from 1 May

This approval concludes the domestic ratification procedure. If the Netherlands deposits the ratification bill with the OECD prior to 1 April 2019, the MLI will have a general entry into effect for the Netherlands as from 1 January 2020. The entry into effect of the MLI is likely to affect the entitlement to tax treaty benefits under covered tax treaties concluded by the Netherlands.


On 5 March 2019, the Upper House of Dutch Parliament approved the MLI ratification bill. The approved bill follows the provisional list of choices and reservations notified by the Netherlands to the OECD in June 2017 (see our Tax Flash) apart from the amendment made by the Lower House as part of their approval of the bill on 12 February 2019 (see our Tax Flash). This amendment led to a (temporary) full reservation (opt-out) of art. 12 MLI, which targets the artificial avoidance of the permanent establishment (“PE”) status through anti-commissionaire arrangements.

The Netherlands has opted for the so-called principal purposes test (“PPT”), like all other jurisdictions that signed the MLI. The PPT is an anti-abuse rule that should deny in certain situations application of treaty benefits, such as for dividends and capital gains. It will be increasingly relevant to demonstrate business purposes of an arrangement or transaction. It is recommended to verify to what extent restructurings would be helpful before 2020.

The Netherlands opted in for most of the MLI measures in its tax treaties. An overview of the MLI choices made by the Netherlands can be found on our MLI webpage.

With the completion of its domestic procedures, the Netherlands will now have to deposit the ratification bill with the OECD in order to bring the MLI into force. As from 1 January 2020, the MLI should apply in respect of withholding taxes for the covered tax treaties concluded by the Netherlands with other jurisdictions that already completed the MLI ratification process or will do so prior to 1 October 2019. With respect to all other taxes, such as corporate income tax, the MLI will have an impact on tax years starting on or after at least nine months after the Netherlands or the other treaty jurisdiction has deposited the ratification instrument with the OECD (whichever date is latest).

The Netherlands listed 82 out of its 94 tax treaties to be brought under the scope of the MLI. Based on the (provisional) choices of its treaty partners, the Netherlands expects 51 of its tax treaties to be affected by the MLI. So far, overall 21 jurisdictions completed their MLI ratification procedures. On the basis of the deposits published as of 5 March 2019, it is expected that the MLI will apply as from 1 January 2020 to the following tax treaties concluded by the Netherlands: Australia, Austria, Finland, France, Israel, Japan, Lithuania, Malta, New Zealand, Poland, Serbia, Singapore, Slovak Republic, Slovenia, Sweden and the UK. It is also expected that the MLI will apply to the tax treaty concluded with Luxembourg as from 1 January 2020 (see Tax Flash). Over time, more tax treaties will be covered as ratification progresses in other jurisdictions. A regularly updated overview of the signatories and ratifications is available here.

For more information on the MLI, we refer to our MLI webpage.


Please contact your trusted adviser at Loyens & Loeff in case you have any queries.


This article was sent as a Tax Flash newsletter on 6 March 2019. Subscribe here to regular news updates.

Prinsjesdag 2021 Indirect Tax - Vatgoed - ENG

Political agreement to amend the 2022 Tax Plan

Increase headline rate corporate income tax and tightening of the earnings stripping rules read more
Prinsjesdag 2021 Tax Flash ENG

Dutch Budget Day 2021: main changes for corporate taxpayers

On 21 September 2021, the Dutch Ministry of Finance submitted the 2022 Dutch Budget to parliament. Read the main changes for corporate taxpayers. read more
EU Court of Justice orders another judicial State aid review of Belgian Excess Profit Rulings

EU Court of Justice orders another judicial State aid review of Belgian Excess Profit Rulings

On 16 September 2021, the Court of Justice of the European Union issued its judgement on whether the Belgian excess profit rulings could qualify as State aid... read more