Administrative circular on anti-abuse provision for registration duties and inheritance taxes published
On 20 July 2012, the tax authorities published an administrative circular on the new anti-abuse provision for registration duties and inheritance tax purposes, which was introduced in the Program Law of 29 March 2012 (click for the full text of the circular: in Dutch / in French). Although the circular only covers anti-abuse in the framework of inheritance tax and registration duties, some of the examples also have a relevant income tax impact. Where the first circular only contained a general and theoretical overview of the new provision (click here for prior coverage), the second circular lists examples of transactions indicating whether or not they constitute abuse of tax law.
Non-exhaustive lists
It should be noted that the assessment of the existence of abuse of tax law must be done on a case-by-case basis. As a result, it is not possible for the tax authorities to provide for an exhaustive list of safe c.q. suspicious transactions. However, the administrative circular lists some transactions which do or do not constitute abuse of tax law according to the tax authorities.
Abuse of tax law
For example, the following transactions are considered to constitute abuse of tax law (unless the taxpayer is able to prove the existence other than tax motives):
| Sterfhuisclausule | Clause mortuaire | Distribution clause of community property to one specific spouse |
| Gesplitste aankoop van goederen voorafgegaan door schenking van geld door de verkrijger van het vruchtgebruik aan de verkrijger van de blote eigendom met eenheid van opzet | Acquisition scindée précédée par une donation des fonds par l’acquéreur de l’usufruit à l’acquéreur de la nue-propriètè en cas d’unité d’intention | Split purchase of property preceded by the donation of money by the buyer of the usufruct to the buyer of the bare property with unity of intent |
| Erfpachtconstructies tussen gelieerde vennootschappen | Construction emphythéose entre sociétés affiliées | Long term lease constructions between affiliated companies |
No abuse of tax law
The following transactions (among other) are considered not to constitute abuse of tax law (unless they are part of a broader abusive construction):
| Handgift/bankgift | Donations manuelles ou effectuées par virement bancaire | Manual donation/ Donation made by a bank transfer between accounts |
| Schenking voor een buitenlandse notaris | Donations devant un notaire étranger | Donation executed before a foreign notary |
| Gefaseerde schenking van onroerende goederen | Donations échelonnées des biens immobiliers | Successive partial donations of immovable property |
| Schenking met voorbehoud van vruchtgebruik of ander levenslang recht | Donations avec réserve d’usufruit ou d’un autre droit viager | Donations with retention of usufruct or any other lifetime right |
| Tontine-/aanwasclausules | Clauses de tontine et d’accroissement | Accruer and accretion clauses |
| Duolegaat voor zover dit na verrekening van de last resulteert in een substantiële netto-bevoordeling van de vereniging | Legs de duo, pour autant que, suite au calcul de la charge, il en résulte un avantage net substantiel pour l’association | Dual legacy in so far it results in a substantial net advantage for the charity association |
Conclusion
Ernst & Young Tax Consultants welcomes the initiative of the government and the tax authorities to provide specific examples regarding the application of the new anti-abuse provision and hopes that the same exercise will be made for the purposes of income taxation.