Tag: Credit arrangement

Netherlands vs. Corp, March 2013, Supreme Court, Case no. 11/01985

X BV  jointly participated in a third party credit arrangement with other group companies. X BV was jointly and severally liable for all the receivables that the creditor had on the other group companies under the credit arrangement, and the recourse (of X BV against the other group companies) that arose from such joint and several liability could not be claimed until the full amount outstanding under the credit arrangement had been repaid. The Supreme Court found that it could be assumed that a third party would not be willing to provide a guarantee only if, at the moment of granting the guarantee, no guarantee fee could be determined. The Supreme Court found that the cross guarantee was an arrangement that originated from shareholder interests. Hence a credit loss resulting from a cross-guarantee agreement was not deductible for tax purposes. Click here for translation Netherland-vs-Corp-March-2013-Supreme-Court-Case-no-11-01985 ...