The M&A situation in the Netherlands has been rapidly changing. The article outlines the most important decisions that a buyer must take, including making the decision to purchase assets or shares of the target firm, and how to finance an acquisition.
Private M&A transactions are generally not governed by law, but parties may agree upon their own legal framework in the contract of sale (the BV or the NV). However the Dutch Civil Code (DCC) offers a set of standard terms for the purchase of assets, shares or business and defines the formalities that are required to be fulfilled when a public transaction is involved.
A public M&A transaction could require approval by the Authority for Consumers and Markets or the European Commission. Certain types of transactions might also be subject to the Work Councils Act and competition regulations.
You can purchase shares and business of the target company in various ways, including issuing new stock as a reward for the deal. In the Netherlands an share merger like this one is exempted from capital contribution tax. However dividend withholding tax (WHT) is normally due on the dividends distributed by the company that acquired it.
Goodwill recognized for accounting purposes in a taxable purchase of business and/or assets may be depreciated over a period of 10 year for CIT purposes in the Netherlands, unless the gain is due to consolidation or netherlands m&a and the role of data room group relief for CIT purposes (clawbacks might apply). Transfer pricing rules are applicable to service entities, including branch offices in other countries. International rulings may provide certainty regarding the tax implications of related-party transactions.