At issue was the point in time where intra-group receivables in the form of dividends denominated in a foreign currency could be said to have been received by the Dutch shareholder “DPP B.V.” for tax purposes. The Dutch participation exemption applies to dividends up to the point at which such a receivable must be capitalized as a separate asset in the balance sheet. Only from that point on would any foreign exchange loss or gain be tax deductible (or taxable). The District Court and the Court of Appeal ruled in favor of the tax authorities. Judgement of the Supreme Court The Dutch Supreme Court declared the appeal unfounded and upheld the judgment of the Court of Appeal. Click here for English translation Click here for other translation ...

A Portuguese subsidiary – A SA – had received intra group loans in foreign currency and had various other transactions with foreign group companies. The tax authorities claimed that the pricing of the transactions had not been at arm’s length and that the interest payment and exchange losses on the loans were not tax deductible. Decision of CAAD The CAAD set aside the assessment and decided in favour of “Welding Mesh SA” Click here for English translation ...