New Dutch Tax Avoidance Rule a Compliance Burden, Advisers Say

A Dutch proposal aimed at clamping down on tax avoidance places a heavy record-keeping and documentation burden on companies, tax advisers warned lawmakers.

The measure implements the European Union Anti-Avoidance Tax Directive that seeks to prevent “hybrid mismatch” structures. These structures are used by some companies to avoid tax by exploiting the differences between two countries’ tax rules.

The proposal aims to stop the use of hybrids like the CV/BV structure, which U.S. multinationals previously used to defer tax on their worldwide profits, the government said in a July statement when it introduced the legislation.

But tax advisers ...