The liquidation loss ruling is a timing lesson for tax, evidence, cash, and wages.
When a Dutch founder closes a foreign sales company, the first conversation is usually not tax doctrine. It is the last wage run, the lease with three months left, the customer contract that moved home, and the bank account that empties too slowly.
The signal has to become readable
That is why the Hoge Raad judgment of 21 March 2025, ECLI:NL:HR:2025:417, matters beyond the large numbers in the file. A Dutch parent had two Irish subsidiaries liquidated in 2013. One had used Irish group relief for more than €115 million of losses. At liquidation, about €110 million of losses remained, no longer usable under Irish tax law. The Dutch parent claimed more than €202 million as a liquidation loss.
Timing decides the file
The Inspecteur refused the deduction. Gerechtshof Den Haag largely allowed it. The Hoge Raad dismissed the State Secretary's cassation appeal. The key point was practical: the condition that no right exists to tax relief for the remaining losses must be tested when the liquidation is completed.
Earlier use of Irish group relief did not, by itself, block the Dutch liquidation loss in this case. The Court also confirmed something many owners miss when they first hear the term liquidation loss. The Dutch calculation does not simply import the foreign subsidiary's unused losses. It starts with the parent's sacrificed investment, reduced by liquidation distributions.
I read that less as a taxpayer victory and more as a timing lesson. In company life, the commercial end often comes first. Staff leave, stock is sold, customers move to another entity, and the local accountant closes the books. Tax law asks another question: what was the legal and factual position when the winding-up was completed?
The budget hears the ruling
The judgment did not stay inside article 13d Wet Vpb 1969. In January 2026, the government informed the Tweede Kamer that the ruling was estimated to cost €840 million incidentally and €65 million structurally each year. A private tax dispute had become a public budget matter.
What the signal changes
The cabinet considered repairs inside the liquidation loss regime. The options included abolition, a 95 percent participation threshold, a link to the subsidiary's unused losses, a proportional method, and a lower €5 million threshold. It did not choose direct repair there, pointing to EU law, implementation, the investment climate, and effects on the SME sector.
The pressure moved elsewhere. The Belastingplan 2026 communication said the Aof employer premium would rise by 0.08 percentage point to absorb the setback in the liquidation loss regime. The cabinet also announced an intended 2027 adjustment for currency results on hedging instruments that can, on request, fall under the participation exemption.
This is Dutch tax in real life. A ruling about a foreign subsidiary can end up in an employer's wage-cost line, even where that employer has never liquidated a foreign entity.
What smaller groups should watch
Most small groups do not carry a €202 million liquidation loss. That does not make the issue remote. A Dutch holding may have a German sales GmbH, a Belgian service company, an Irish development entity, or a former expansion vehicle that no longer earns its keep. The amounts are smaller, but the weak spots are familiar.
The owner-manager may say the foreign company is finished. The tax record has to say more. It has to show when liquidation was completed, what the sacrificed amount was, what distributions came back, what foreign losses still existed, and whether any tax relief right remained at that date.
What founders should check
Current article 13d Wet Vpb 1969 uses later numbering than the 2013 text in the Hoge Raad case, but the discipline remains. The non-relief condition still matters. So does the question whether the undertaking was really discontinued or continued by the taxpayer or a connected body.
Article 13e is still relevant where a calculated liquidation loss waits because the business activity continues elsewhere in the group. Return to the founder closing the foreign sales company. If the customer list, laptop stock, licence, staff member, or lease has moved to the Dutch BV, the story is not simply that the foreign entity died. Part of the business may have moved desks.
Where the ledger earns trust
A careful liquidation story is not built from memory. It is built from board minutes, shareholder decisions, liquidation accounts, foreign tax correspondence, group relief records, intercompany debt papers, bank releases, final invoices, and treasury notes. The ledger must agree with the legal documents. The Dutch return must agree with both.
Treasury belongs in the same conversation. The government's intended 2027 currency measure makes hedges more than a side issue. A Belastingdienst knowledge group position from December 2025 shows the kind of detail that can matter: the protected currency risk, the value of the participation, the decision moment for a distribution, and the link between instrument and exposure.
For a small Dutch group, that means the file should be ready before the accountant, the foreign director, and the bank officer all move on. The calm moment is before dissolution, when the facts are still reachable and the ledger still speaks in the present tense.
Close the company, not the memory
The honest lesson is not that every foreign closure is dangerous. Closure has two lives. One is commercial: people leave, contracts stop, rent ends, and cash is collected. The other is evidential: dates, rights, distributions, losses, continuation, and tax treatment must still be clear when the company is no longer in anyone's daily inbox.
A foreign subsidiary can close quietly. The Dutch consequences may not. Sometimes they reach the corporate tax return. Sometimes they reach the payroll budget. Always, they ask the same question: can the company still tell the story of its own ending?
Sources
- Uitspraak ECLI:NL:HR:2025:417 – Semantius
- Rechtspraak – Supreme Court ruling on non-relief condition and Irish group relief
- Wettenbank – Current statutory framework for liquidation loss and continuation
- Rijksoverheid – Cabinet response and budgetary impact after the ruling
- Rijksoverheid – Belastingplan 2026 public signal on Aof premium and 2027 currency measure
- Belastingdienst Kennisgroepen – Liquidated undertaking continued within a fiscal unity
- Belastingdienst Kennisgroepen – Turboliquidation, intermediate holding, and sacrificed amount
- Belastingdienst – Advance certainty request on liquidation loss withdrawn
Referenced in the article
Column | Ledger & Tax
Low Contractor Rates Put Dutch Payroll Risk on the Table
The proposed €38 presumption is civil law, but the tax pressure is already real.
Column | Ledger & Tax
A Quiet Bond Can Still Move Your Box 3 Tax
Belastingdienst has made zero-coupon bonds a yearly value question, not a coupon question.
Column | Compliance
The BSN Question Makes Tax Payments a Discipline Issue
Privacy may improve, but the payment reference still decides where tax cash lands.
The Polder is written for readers who need the Dutch business environment translated into practical meaning. Corrections, source policy and editorial accountability are part of the publication record.
