The Dutch Ministry of Finance will not introduce new measures targeting the use of multiple BVs to optimise the earnings stripping threshold, at least for now. State Secretary Eerenberg confirmed this in a letter to the Dutch Parliament, concluding that none of the options examined are suitable for introduction at this stage.

The background: under the current earnings stripping rule (article 15b Dutch Corporate Income Tax Act, implementing the ATAD interest limitation), interest deductions are limited to 24.5% of EBITDA or €1 million per entity, whichever is higher. Real estate investors who hold properties across separate BVs can benefit from that €1 million threshold multiple times, i.e., once per entity. This practice has drawn scrutiny from the Dutch Tax Authority.

Eerenberg examined three policy options: (i) a group-wide threshold of €1 million, (ii) a reduced threshold of €200,000 for real estate entities financed largely through group loans or (iii) extending another rule (article 10a) to deny interest deductions on group loans used to finance third-party rental property. All the options have some disadvantages.

More importantly, the European Commission is expected to present a proposal on 24 June 2026, which will likely include a simplification of the earnings stripping rule. Leaked indications suggest the fixed threshold may increase, the deduction ratio may rise from 24.5% to 30% of EBITDA, and external financing may be excluded altogether. Eerenberg prefers to assess those changes before committing the Netherlands to its own course.

Good news for now and we are looking forward to the EU proposal and discussing the overall impact with you.