18 January 2023
A plastic surgeon borrowed € 632,891 from his Dutch limited liability company (BV) as per 31 December 2009. In 2010, the loan increased to € 803,414. The Court of Appeal ruled that BV forewent its creditor rights in 2010, resulting in a taxable distribution for the full amount of € 803,414. The Court of Appeal also applied a penalty.
Following Houthoff's appeal, the Dutch Supreme Court ruled that the Court of Appeal should have made a distinction between (a) distributions made by BV when it pays funds to its shareholder, and (b) distributions that occur due to foregone creditor rights by the BV. Therefore, the Court of Appeal should have further motivated if- and to what extent the BV made a distribution in 2010. Furthermore, a tax return prepared- and filed by a renowned tax advisor may generally be relied upon. Therefore, the Court of Appeal should also have further motivated why the penalty was justified, given that the plastic surgeon provided all relevant information to his tax advisor at the time.
The Supreme Court referred the case to another Court of Appeal to further assess these two points. This case resulted in interesting new case law on when- and to what extent taxable distributions have to be taken into account between a BV and its shareholder.