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Nederlands (Dutch)
The Supreme Court recently ruled that costs related to the purchase or sale of a participation are tax deductible in case the transaction is not finalised.
Purchase costs or selling expenses incurred to acquire or sell a participation are excluded from tax deduction by means of the participation exemption (applicable when holding 5% or more of the shares in a company). The Supreme Court has defined purchase costs or sales costs as costs that would not have been incurred without that acquisition or disposal.
With external selling or purchasing costs, a clearer distinction can usually be made in this context than in the case of internal costs, the question of internal costs (for example, salaries of employees assisting with the purchase or sale in question) is to what extent these costs have been incurred solely for the purchase or sale.
Purchase costs or selling expenses only fall under the participation exemption insofar as the relevant purchase or sale has actually taken place.
The Supreme Court ruled on a situation in which a purchase or sale initially fell through, but then succeeded in a subsequent phase with another party. In such a case, it must be assessed to what extent the sales costs incurred in that first phase would also have been incurred if that phase had not taken place. Only those costs are not deductible.
It is not always possible to estimate in advance whether a purchase or sale will take place, therefore (tax) accountancy rules imply that the costs related to the planned purchase or transfer of a participation will be activated on the company’s balance sheet until it is clear whether or not the purchase or disposal goes forward.
Subsequently, it is determined to what extent the activated amounts are subject to the participation exemption (to be activated upon purchase), the remaining initially activated amount is tax deductible.
