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    Rulings subject of tax discussion: justified or not?

    In the Netherlands, tax rulings have been subject to discussion for some time now. The financial media are in favour of abolishing these so-called tax deals, as they feel they do more harm than good. In their opinion, abolishing these rulings would greatly enhance the Dutch negotiating position in the EU. The majority of tax advisors is against a complete abolition, but does favour greater transparency. Would publishing these rulings anonymously enhance their acceptance?


    Stefan Ubachs (Senior Manager Transfer pricing at Quantera Global) and Theo Elshof (Managing Director Quantera Global and former member of the Dutch Tax Authorities’ APA team) are both in favour of more transparency, but not for transparency’s sake alone. “We should be proud of our high-level APA/ATR practice”.

    Elshof and Ubachs question whether the publication of rulings will lead to increased transparency. Ubachs: “Without knowledge of the relevant facts and circumstances, it is nearly impossible to judge whether the agreements made in individual cases are in line with the prevailing standards.” Elshof: “Transparency belongs in this day and age, but publishing anonymous rulings is not the right way to go about it, in our opinion. It would also significantly increase the workload of the tax authorities .”

    Ubachs adds: ”Transparency of general ruling policies is fine. General policy frameworks are already public, but transparency should not lead to a situation in which the identity of an individual tax payer can be deduced from the published ruling. In the past years, transparency between the tax authorities of different countries has greatly increased with the exchange of rulings. Publishing individual agreements does not increase the ability of tax authorities to assess these agreements.”


    The view created by the media, that the ruling practice is negotiated in backrooms by the happy few, is absolutely untrue, according to Elshof. “This does not reflect reality. APAs are open to anyone in the Netherlands, also to the small- and medium-sized entrepreneur.

    In general, larger companies active in multiple countries have more experience with APAs. They may be more prone to request a ruling than smaller companies with less experience. Costs of advice could also be a barrier for smaller companies to start up a ruling process, but that does not mean they do not have access.”

    Ruling process

    The ‘backroom’ hallmark also diminishes the ruling process. Elshof explains that the development of a ruling is a well-documented process. He is backed by former Dutch state secretary Wiebes, who, in 2017, stated that the current Dutch APA/ATR policy is not a secret. The same legal principles apply as with normal tax assessments. Ubachs recognises this: “The security the Dutch tax authorities provide upfront, is determined according to the same legal framework as any tax assessment. This is the same for everyone, so a ruling does not provide a privilege to a tax payer that he would otherwise not have had.”

    Abolition bad for business

    The abolition of rulings would be bad for business. Elshof: “The possibility of ‘upfront security’ in the Netherlands is a great asset and completely fits our culture of an open and transparent way of doing business. By abolishing rulings we would loose that asset. Additionally, it would mean that we would have to settle every fiscal dispute in court. I am actually in favour of an extension to bi- and multilateral APAs. The possibilities are still somewhat limited, but, especially given the call for increased transparency, the time is right.”