Which is the tax treatment of interest in the Netherlands?
With regard to the interest paid by an Italian company to a company resident in The Netherlands, according to Italian Law the interest can follow different regimes.
1) Exemption regime
Interest paid to foreign companies is not taxed in Italy if it arises from:
- a bank deposit account;
- a bond, bond bail or other guarantees, securities swap operations and loans on securities, whether received from a company that resides in States which have an adequate exchange of information with Italy.
The exemption regime is also provided for payments of interest between associated companies of different EU member States, including between their permanent establishments in presence of some conditions, pursuant to article 26-quarter of the Presidential Decree no. 600 of September 29, 1973 (DPR no. 600/1973). Interest payments should, however, have been taxed in the EU Member States where companies which receive the payments are located.
However, in the case at hand these exemption regimes are not applicable, since the Italian company pays interest to the Dutch company for the money loans. In any event, the conditions for application of article 26-quarter of the DPR no. 600/1973 do not exist.