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EACC & Member News

EACC Network Survey on Business Travel to the US

#internationaltravel has resumed and as of June 12th #covidtesting requirements for passengers boarding flights to the #unitedstates are lifted!

Yet members across the #EACC #network report that entry to the #us remains fraught.

  • Are you based in Europe or the United States and are you having issues with #ESTAs or #USVisas?
  • Did you have to postpone or cancel your #businesstrip or #expatriation to the US?
  • Did you or your company lose #business opportunities as a result?
  • Or is everything back to normal?

Let us know either way through the link below!


(takes 1 minute)


EACC & Member News

Update to the transfer pricing guidelines

On Thursday the 20th of January 2022 the Organisation for Economic Co-operation and Development (also known as: ‘OECD’)  released an update to the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. This update mainly incorporates earlier released documents, but it also makes some consistency changes to the OECD Transfer Pricing Guidelines of 2017. These consistency changes were needed to produce the consolidated version of the Transfer Pricing Guidelines and were approved by the OECD/G20 Inclusive Framework on BEPS on the 7th of January 2022.

The following documents are incorporated in the Transfer Pricing Guidelines 2022:

Revised Guidance on the Application of the Transactional Profit Split Method

The guidance set out in this report responds to the mandate under Action 10 of the BEPS Action Plan, which requires the development of:

“rules to prevent BEPS by engaging in transactions which would not, or would only very rarely, occur between third parties. This will involve adopting transfer pricing rules or special measures to: … (ii) clarify the application of transfer pricing methods, in particular profit splits, in the context of global value chains”

Since 2010, the Transfer Pricing Guidelines states that the most appropriate method should always be used. This method can be (among others) the profit split method. This revised guidance provides clarification and significantly expands the guidance on when a profit split method may be the most appropriate method. It describes certain indicators such as the unique and valuable contributions each party makes to the transaction and the share of economically significant risk. Furthermore, the revised guidance includes several examples illustrating the principles discussed.

Guidance for Tax Administrations on the Application of the Approach to Hard-to-Value Intangibles

BEPS Action 8 addresses transfer pricing issues to controlled transactions involving intangibles, since intangibles are by definition mobile and they are often hard-to-value which makes base erosion and profit shifting possible. The OECD states that misallocation of these profits has heavily contributed to base erosion and profit shifting.

The hard-to-value intangibles approach disarms the negative effects of information asymmetry, by ensuring that tax administrations can consider ex post outcomes as presumptive evidence about the appropriateness of the ex-ante pricing arrangements. I.e. administrations can take later outcomes in consideration of the earlier dealt with pricing agreement. At the same time, taxpayers have the possibility to rebut such presumptive evidence by demonstrating the reliability of the information supporting the pricing methodology adopted at the time of the controlled transaction took place. This is to prevent later information to rule over the earlier information, which would certainly subvert the legal security of the taxpayer.

The guidance aims at reaching a common understanding and practice among tax administrations on how to apply adjustments resulting from the application of the hard-to-value intangibles approach. The guidance should improve consistency and reduce the risk of economic double taxation.

Transfer Pricing Guidance on Financial Transactions

The 2020 report on financial transactions pertains to Action 4 and provides guidance in the accurate delineation of financial transactions, particularly in capital structures of multinational enterprises. Furthermore, it analyses the pricing of a controlled financial transaction. The report describes the transfer pricing aspects of financial transactions such as intra-group loans, treasury functions, cash pooling, hedging, guarantees and captive insurance.

Action 4 constitutes the limitations on interest deductions, and aims to limit base erosion through the use of interest expenses to achieve interest deduction or to finance the production of exempt or deferred income.

EACC & Member News

ATAD 3: the end for shell companies?

What’s happening?

On the 22th of December, the European Commission (hereinafter: ‘EC’) has presented an initiative to combat the misuse of shell entities for improper tax purposes (‘ATAD 3’). This proposal will ensure that shell companies in the EU with no- or minimal economic activity are unable to benefit from any tax advantages, consequently discouraging their use. Furthermore, the Commission Ter Haar published a report on ‘doorstroomvennootschappen’ in the Netherlands last October.

Shell companies can be used for aggressive tax planning or tax evasion purposes. Businesses can direct financial ‘flows’ through these shell entities towards tax friendly jurisdictions. Similar with this, some individuals can use shell entities to shield assets – more specific real estate – from taxes, either in their respective home country or in the country where the property is located. The main purpose of this proposal is therefore to address the abusive use of so-called shell companies, being referred to as legal entities with no, or only minimal, substance and economic activity.

History intermediary holding companies

International groups often use intermediate holding companies to hold shares in subsidiaries organized on a regional or divisional basis. Furthermore, holding companies are often used as the vehicle for investing in portfolio companies in a private equity context. In past times, it was not particularly controversial that holding companies were entitled to the potential benefits of tax treaties and potential directives in their country of residence. This would frequently restrict the right of investee jurisdictions to tax dividends and gains derived by the holding company from its local subsidiaries. As shown in the timeline underneath, the perception and position of these companies has changed, with an accumulation of measures that potentially restrict the access to the benefits and directives.

This all started with the introduction of the term “beneficial ownership” into the OECD’s Model Tax Convention in 1977. The question was asked: who does actually benefit from this/these payment(s)? Whilst being slightly controversial in the 70’s, the term now appears in most tax treaties and intents to prevent treaty shopping by ensuring that the benefits of the dividends, royalties and interest articles are only accessible to residents of the contracting state that are the beneficial owners of the payment. After this, the OECD’s report on the use of conduit companies in 1986 ruled conduit companies out of the beneficial ownership regard. Nevertheless, there was no generally agreed definition of the term ‘beneficial ownership’ in tax treaties and the interpretation would follow the domestic law of the contracting states. The first hint of an international fiscal meaning of this term stems from the Indofood case (Indofood International Finance Ltd. V JP Morgan Chase Bank NA, 2006). To prevent falling foul of the beneficial ownership test, certain groups reviewed their holding structure(s) and looked to eliminate fully back-to-back financing arrangements. Furthermore, some structures which involved payment chains were set up with an “equity gap”. These structures reflected a widespread view that beneficial ownership was an objective test that was indifferent to the motives behind these holding company arrangements.

Whilst having a long history, reverting back to said changes in the OECD model treaty in the 70’s, the real challenge to the treaty status of holding companies began in 2015, when the Base Erosion and Profit Shifting project (‘BEPS’) recommended measures to restrict inappropriate usage of tax treaties. The bar is consequently set higher and higher for the criteria that holding companies need to meet in order to benefit from relief from withholding taxes and exemptions to non-resident capital gains tax. The high apex for this approach is the just published proposal to end the misuse of shell entities. Some of the statements suggest that it may never be appropriate for an intermediate holding company (using the term ‘shell entity’) to benefit from reductions in withholding taxes under tax treaties and EU directives.

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The Dutch government already set up a commission that investigated the use of the so-called shell companies and their potential misuse of the Dutch tax system. This report was published last October.

Dutch investigation on shell companies (Commission Ter Haar)

Doorstroomvennootschappen’ (as they’re often referred to in Dutch) provide little benefit to the Dutch economy, disadvantage developing countries disproportionately through loss of tax revenue for developing countries in particular, and the phenomenon damages the reputation of the Netherlands. These are the main conclusions of the Committee on Flow-through Companies, chaired by Mr. Ter Haar, which presented its final report recently.

The committee describes the relevant components of the Dutch tax system that, at least until recently, have made the Netherlands attractive to flow-through companies. These include the participation exemption, the extensive treaty network, the absence of a withholding tax on interest and royalties and the ruling practice. The report describes examples of unintended use of each of these aspects of the Dutch tax system. In combination with the well-organized financial advice and services sector, this has led, according to the Committee, to a sizeable financial flow. The Committee believes that the measures already taken are expected to put an end to (part of) the tax-driven flow of interest and royalties. This does not mean that the Netherlands should be expected to lose its position as a country of establishment for empty holding companies, even though the Dutch tax system is no longer unique compared to other countries. According to the Committee there will still be a large group of (almost) empty conduits that make use of the Dutch tax infrastructure, whose contribution to the economy is small. The Committee therefore recommends further steps, but at the same time sees that far-reaching unilateral measures do not immediately offer a solution. In the first place, the Committee recommends a proactive attitude and a pioneering role with respect to international and European initiatives. These include the revision of the international tax system within the Inclusive Framework of the OECD and the announced EU Directive proposal on flow-through companies. According to the committee, the Netherlands should advocate measures that involve both the targeted exchange of information and to limit the benefits of the Interest and Royalties Directive and the Parent-Subsidiary Directive.

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The advantage of this structure is that the dividends, by making use of the Dutch treaty network, without or with reduced withholding of local tax, arrive at the company in the country of residence (Country A), without or with reduced withholding of local tax, compared to the situation where the payment is made directly to the country of residence (Country A) by the source country (Country C). This is just one example of a (flow-through) structure in which the Dutch treaty network plays a role, in combination with the participation exemption and the dividend withholding tax exemption in treaty situations.

Because the Netherlands has long had a large bilateral tax treaty network, the Netherlands is an attractive country for ‘treaty shopping’. When the tax treaties are concluded, it is assumed that it is up to the source country to prevent the reduced rate of withholding tax, which is wrongly applied mostly.

Unilateral measures cannot prevent other countries from playing the role as flow through country. To avoid international tax avoidance through ‘empty entities’, international agreements are therefore necessary. The committee lastly advises also a constructive attitude by the Netherlands to the ongoing initiatives of the European Commission.

ATAD 1-2

The public perception of tax evasion has shifted in recent years, by taking a drastic turn. In particular, the credit crisis of 2008 has changed the social acceptance of tax avoidance by multinationals in particular. With government deficits and rising government debt, it was considered unfair that a number of multinationals paid (relatively) little tax on their world profits.

This all accumulated into a public hearing of officials of Amazon, Google and Starbucks organized by the Public Accounts Committee in the UK in 2012. The committee chair Ms. Hodge said (the later iconic words):

We’re not accusing you of being illegal, we’re accusing you of being immoral”.

This all led to the BEPS-project and consequently ATAD. There have been 2 Anti-Tax-Avoidance-Directives already put into effect. ATAD 1 introduced 5 sets of minimum standards (interest limitation rule, GAAR, CFC rules, hybrid mismatches and exit taxation). In the second ATAD, subsequent rules relating to hybrid mismatches were finalized on 29 may 2017 when the ECOFIN accepted this directive. ATAD is based on Article 115 of the Treaty on the Functioning of the EU (‘TFEU’).


Shell Companies

The definition of the widespread term ‘shell’, often interchangeably with terms such as ‘letterbox’, ‘mailbox’, ‘special purpose entity’, special purpose vehicle’ and similar, is defined differently in different contexts. For the purpose of ATAD 3, shell companies refer to three types of shell companies:

  • Anonymous shell companies
  • Letterbox companies
  • Special purpose entities

The main common feature of the above three types is the absence of real economic activity in the Member State of

registration, which usually means that these companies have no (or few) employees, and/or no (or little)

production, and/or no (or little) physical present in the Member State of registration

What will change?

The proposed rules will establish transparency standards around the use of shell entities, so that their abuse can be detected more easily by tax authorities. Using a number of objective indicators related to income, staff and premises, the proposal will help national tax authorities detect entities that exist merely on paper.

The proposal introduces a filtering system for the entities in scope, which have to comply with a number of indicators. These different levels constitute a type of gateway. This proposal sets out three gateways. If an entity crosses all three gateways, it will be required to annually report more information to the tax authorities through its tax return.

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First gateway

The first level looks at the activities of the companies based on the income they receive. This gateway is met if >75% of an entity’s overall revenue in the last two tax years does not derive from the entity’s business activity or if more than 75% of its assets are real estate or other private property of particularly high value.

Second gateway

The second level requires a cross-border element. If the entity receives the majority of its relevant revenue through international transactions linked to another jurisdiction or passes this relevant income on to other entity’s situated abroad, the entity passed to the next and last gateway.

Third gateway

The third, and last, level focuses on whether corporate management and administration services are performed in-house or are outsourced.

Crossed all gateways?

An entity crossing all levels will be obliged to report information in its tax return related to the premises of the entity, its bank accounts, the tax residency of its directors and employees etc. These are the so-called substance requirements. All declarations should be accompanied by supporting evidence. If one of the substance requirements isn’t met, the entity will be presumed to be a ‘shell company’.

When will the proposal come into force?

Once adopted by the Member States, the Directive should come into effect on 1 January 2024.

Rebuttal arrangement?

If the substance criteria are not met, entities still have the opportunity to rebut the presumption of being a shell. Additional evidence needs to be presented, such as detailed information about the commercial, non-tax reason of their establishment, the profiles of their employees and the fact that decision-making takes place in the Member State of their tax residence.

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Tax Consequences

If an entity is deemed to be a shell company, the benefits and reliefs of the tax treaty network of its Member state are not applicable. Furthermore, the company will not be able to qualify for the treatment under the Parent-Subsidiary and Interest and Royalty Directives. To support the implementation of these consequences, the Member State of residence of the company will either deny the shell company a tax residence certificate or the certificate will specify that the company is a shell.

Furthermore, payments to third countries will not be treated as flowing through the shell entity, and will be subject to withholding tax at the level of the entity that paid to the shell. According with this, inbound payments will be taxed in the state of the shell’s shareholder. Relevant consequences will apply to shell companies owning real estate assets for the private us of wealthy individuals and which as a result have no income flows. Such real estate assets will be taxed by the state in which the asset is located as if it were owned directly by the individual.

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Scenario 1 EU source jurisdiction of the payer – EU shell jurisdiction – EU shareholder jurisdiction

In this case, all three jurisdictions fall in the scope of the Directive and are consequently bound by ATAD3:

  • EU subsidiary: this entity will not have a right to tax the payment, but may apply domestic tax on the outbound payment to the extent it cannot identify whether the undertaking’s shareholder is in the EU.
  • EU shell: this entity will continue to be a resident for tax purposes in the respective Member State and will have to fulfil relevant obligations as per national law, including by reporting the payment received; it may be able to provide evidence of the tax applied on the payment.
  • EU shareholder: this entity will include the payment received by the shell undertaking in its taxable income, as per the national law and may be able to claim relief for any tax paid at the source, including by virtue of EU directives. It will also take into account and deduct any tax paid by the shell.

Scenario 2 Non-EU source jurisdiction of the payer – EU shell jurisdiction – Non-EU shareholder jurisdiction

  • Third country subsidiary: may apply domestic tax on the outbound payment or can decide to apply tax according to the tax treaty in effect with the third jurisdiction of the shareholder if it wishes to look through the EU shell entity as well.
  • EU shell: will continue to be a resident for tax purposes in a Member State and fulfil relevant obligations as per national law, including by reporting the payment received; it may be able to provide evidence of the tax applied on the payment.
  • Third country shareholder: while the third country shareholder jurisdiction is not compelled to apply any consequences, it may consider applying a treaty in force with the source jurisdiction in order to provide relief.
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Scenario 3 Non-EU source jurisdiction of the payer – EU shell jurisdiction – EU-shareholder jurisdiction

In this case the source jurisdiction is not bound by ATAD 3, while the jurisdictions of the shell and the shareholder fall in scope.

  • Third country source jurisdiction: this entity may apply domestic tax on the outbound payment or may decide to apply the treaty in effect with the EU shareholder jurisdiction.
  • EU shell: this entity will continue to be resident for tax purposes in the respective Member State and will have to fulfil relevant obligations as per national law, including by reporting the payment received; it may be able to provide evidence of the tax applied on the payment.
  • EU shareholder: this entity shall include the payment received by the shell undertaking in its taxable income, as per the national law and may be able to claim relief for any tax paid at source, in accordance with the applicable treaty with third country source jurisdiction. It will also take into account and deduct any tax paid by the shell.

Scenario 4 EU source jurisdiction of the payer – EU shell jurisdiction – third country shareholder jurisdiction

In this case only the source and the shell jurisdiction are bound by ATAD3 while the shareholder jurisdiction is not.

  • EU subsidiary: this entity will tax the outbound payment according to the treaty in effect with the third country jurisdiction of the shareholder or in the absence of such a treaty in accordance with its national law.
  • EU shell: will continue to be resident for tax purposes in a Member State and will have to fulfil relevant obligations as per national law, including by reporting the payment received; it may be able to provide evidence of the tax applied on the payment.
  • Third country shareholder: while the third country jurisdiction of the shareholder is not compelled to apply any consequences, it may be asked to apply a tax treaty in force with the source Member State in order to provide relief.

Scenarios where shell entity’s are resident outside the EU fall outside the scope of ATAD3.

What to do?

First of all, monitoring the developments in the BEPS 2.0 and ATAD 3 proposals is advised. Also, looking at whether there are operating entities withing the group in low tax jurisdictions, entities with primarily passive income, and companies where the local substance may fall short on the types of criteria suggested by the EC. When the key risks are identified, choices may include removing problematic holding companies, using different jurisdictions, or taking steps to bolster local substance. International groups should take the appropriate measures in time to get ahead of these changes.

Do you have questions regarding the implications of ATAD 3 for your company or do you need certainty in advance? Feel free to call us! This is really dynamic work, which also gives you insight into your compliance with the changing international rules. We are happy to help.

EACC & Member News

Deloitte: 2022 Dutch Tax Plan – Budget Day (Prinsjesdag)

On 21 September 2021, the government submitted the 2022 Tax Plan Package to the Lower House. This package includes the following bills:

  • 2022 Tax Plan
  • 2022 Miscellaneous Tax Measures
  • Act amending the tax treatment of stock option rights
  • Act introducing delegation provisions for compensation in cases of hardship
  • Act implementing the tax liability measure from the second EU Anti-Tax Avoidance Directive.
  • Rate reduction and monthly adjustments to the landlord levy

Moreover, a bill has been presented that aims to counter mismatches in the application of the arm’s length principle in corporate income tax.

Most measures will enter into force on 1 January 2022. Where this is not the case, we have indicated this. The bills may be amended during their parliamentary debate. The proposed measures per type of tax type are listed below.

Webcast Tax Plan 2022

Corina van Lindonk, Aart Nolten and Eddo Hageman discussed the most noticeable measures of Tax Plan 2022.

View (in Dutch) 

Measures by type of tax:

Corporate income tax and dividend witholding tax

Outline of corporate income tax and dividend withholding tax measures

Wage and income tax

Outline of wage and income tax

VAT and excise

Outline of VAT and excise

Procedural tax law, collection of taxes and supplementary benefits

Outline of procedural tax law, collection of taxes and supplementary benefits

Car taxes and environmental taxes

Outline of car taxes and environmental taxes

Landlord levy and property transfer tax

Outline of landlord levy and property transfer tax


Schedule parliamentary debate Tax Plan 2022

Tuesday 21 September 2021 Budget Day: introduction.
Wednesday 29 September 2021 Closed technical briefing by civil servants of the Ministry of Finance.
Wednesday 6 October 2021 Contribution date for the report.
Tuesday 19 October 2021 Memorandum of reply.
Monday 25 October 2021 First legislative consultation.
Thursday 28 October 2021 Written answers to questions in response to the first legislative consultation.
Monday 1 November 2021 Second legislative consultation.
Tuesday 9 and Wednesday 10 November 2021 Plenary hearing.
Thursday 11 November 2021 Letter on evaluation of motions and amendments.
Thursday 11 November 2021 Voting.
EACC & Member News

Houthoff launches the Dutch Scheme Tool: a visualisation tool for the new Dutch Scheme (Wet Homologatie Onderhands Akkoord)

Houthoff launches the Dutch Scheme Tool: a visualisation tool for the new Dutch Scheme (Wet Homologatie Onderhands Akkoord). The tool is freely and publicly available at


The Dutch Scheme is a Dutch pre-insolvency procedure inspired by the scheme of arrangement in the UK Companies Act 2006 and Chapter 11 of Title 11 of the US Bankruptcy Code. The Dutch Scheme allows a debtor or restructuring expert to propose a plan that may help avoid the debtor’s insolvency. The Dutch Scheme entered into force on 1 January 2021.

The Dutch Scheme combines a fast and flexible framework for concluding pre-insolvency schemes with a high degree of deal certainty. Such instrument did not exist in Dutch insolvency law until now. As a framework, the Dutch Scheme does not prescribe the contents of a plan. Proponents can draft a plan as they see fit (e.g. extending and/or reducing debt, debt for equity swap, sale of assets, limited to only a subset of the capital structure, etc.). The Dutch Scheme provides plan proponents with a high degree of flexibility on structuring the process (e.g. timing, electronic voting, etc.).

A two-pager describing the key features of the Dutch Scheme can be found here.


The Dutch Scheme Tool visualises the changes in a company’s capital structure, outstanding liabilities and value distribution under a possible plan under a Dutch Scheme. As such, the Scheme Tool offers you a first visual impression of a proposed plan under a Dutch Scheme and helps better understand such plan. In addition, the Scheme Tool offers a first rough analysis whether the main tests for confirmation (homologatie) of the plan under the Dutch Scheme are likely met or not. We invite anyone to try the Dutch Scheme Tool at


The Tool is developed by the Restructuring and Insolvency practice group at Houthoff. For more information about Houthoff’s Restructuring and Insolvency practice please click here.

EACC & Member News

Deloitte: Side-by-side comparison of Biden’s and Trump’s tax policy

On November 3, 2020, the 59th United States presidential elections will be held. President Donald Trump (Rep.) will try to get re-elected against challengers Joe Biden (Dem.), former vice-president of the Obama administration. Based on announcements and publications made available so far, it is clear that both candidates have (strongly) diverging agendas ranging from (US and international) tax topics to broader policy considerations and issues such as the Economy, Healthcare and Climate Change.

Given that differences between the plans of Trump and Biden as well as the uncertainty regarding the outcome/winner, these elections can potentially have a big impact for international businesses headquartered or operating in the United States.

Download the full report for a side-by-side comparison of Biden’s and Trump’s respective proposals. The publication offers a high-level discussion of the two candidates’ tax policy proposals on TCJA and other issues, along with a side-by-side comparison of their positions on certain key tax questions.

Side-by-side comparison of Biden’s and Trump’s tax policy proposals

EACC & Member News

A word from our Presidents

Dear Members,

Our transatlantic relationship continues to be put to the test with the emergence of the COVID-19 pandemic confronting international business on a scale not seen since the advent of the financial crisis. The European American Chamber of Commerce will address the challenges that the pandemic brings together with focus and resolve, and in a spirit of collaboration and in recognition of our shared interests.

We see our collective role supporting our members by sharing information and facilitating the connections you need to navigate this difficult period in an effort to restore business confidence and growth.

Our Executive Directors are currently working together on a series of transatlantic webinars for you and your teams to bring you in the upcoming weeks the kinds of thought leadership that has exemplified  our programs since our founding. We encourage you to use them a resource and to share best practices with other members on both sides of the Atlantic. Please do not hesitate to reach out to your local chapter with your ideas and requests for assistance.

Keep safe and healthy.

Nathalie BERLIET (Lyon), Howard DANIEL (Carolinas),  Myrthe GÖRTZEN (Netherlands), Guillaume MARTINEZ (France), James ROSENER (New York),  Yannick SCHILLY (Cincinnati),  Alan SUTIN (Florida)

The Presidents of the EACC Chapter Network