The M&A landscape in the Netherlands is rapidly changing. The article reviews the essential decisions a buyer has to 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 largely not governed by law but parties may agree upon their own legal structure 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 specifies the formalities that are required to be fulfilled when there is a public transaction involved.
An M&A public transaction might need to be approved by the Authority for Consumers and Markets (ACMM) or the European Commission. In addition the Work Councils Act (Wet op the Ondernemingsraden) and competition regulations may be applicable to certain types transactions.
Shares and the business of a target company may be acquired in a number of ways, including by offering new shares as a reward for the deal. In the Netherlands the Netherlands, a merger of shares like this is exempted from capital contribution tax. However dividend withholding tax (WHT) is typically due on the dividends distributed by the company that acquired it.
The Netherlands permits the depreciation of goodwill to be used for accounting purposes when a business or asset is acquired. This can be carried out over a period of ten years, unless it is classified as a group relief for CIT (clawbacks could apply). Service organizations, including branch offices that are located in other countries are subject to transfer pricing regulations, and may be eligible for advance certainty on the tax consequences of proposed related-party transactions by way of the provision of international rulings.
