On November 17, 2011, the Lower House accepted the Tax Plan 2012. One of the provisions in this bill is a measure against interest deduction by acquisition holding companies for corporate income tax purposes (Section 15ad Corporate Income Tax Act 1969, “Section 15ad”). For further information regarding the content of Section 15ad, please refer to our recent news item of November 17, 2011, where we discussed the provision as it was formulated following the fifth Memorandum of Amendment.
Adjustment grandfathering
The bill submitted contained full transitional rules for existing fiscal unities. On the basis of those rules, the deduction limitation did not apply to the financing of acquisitions included in a fiscal unity before January 1, 2012. As we assumed in our memorandum of November 16, 2011, the adjustment of the grandfathering with a view to the prevention of anticipatory behavior was further discussed during the plenary debate on November 15 and 16, 2011.
This resulted in an amendment ensuring that Section 15ad will become effective as from the date on which the amendment was submitted, i.e. November 15, 2011. The amendment was accepted so that, as from January 1, 2012, Section 15ad will also cover acquisitions that were or will be included in a fiscal unity in the period November 15, 2011, through December 31, 2011.
An amendment the purpose of which was to ensure the application of Section 15ad, as from January 1, 2013, to acquisitions in situations where the fiscal unity was entered into in the period January 1, 2007 through January 1, 2012, was rejected.
Follow-up
The preliminary meeting of the Upper House Finance Committee has been planned for November 29, 2011. The plenary debate in the Upper House has been placed on the agenda for December 12 and 13, 2011.