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Amsterdam/ München, 25 April 2025 – Borgen Tax and Flick Gocke Schaumburg have advised NorthC, a leading regional data center provider in northwestern Europe, on the acquisition of six data centers from Colt Technology Services (Colt) in Germany and the Netherlands.

The transaction includes data centers in key metropolitan regions including Frankfurt, Berlin, Hamburg, Munich, Düsseldorf, and Amsterdam. The data centers collectively have a power availability of over 25 MW. As part of the agreement, Colt and NorthC entered into a long-term partnership agreement, whereby Colt will remain an important customer in the to be acquired data center facilities.

This acquisition further increases NorthC’s capabilities to serve customers in multiple regions in the Benelux and DACH and establishes nationwide coverage in Germany. It also adds significant available capacity in Amsterdam, one of NorthC’s core markets.”

The Taxand teams supported NorthC on the tax aspects of the acquisition and financing structure as well as the purchase agreement in relation to this transaction.

Taxand Tax advisors to NorthC:

Netherlands: Borgen Tax

Gertjan Hesselberth, Karel Pellemans, Martijn Jaegers, Coen van Duijvenbode, Richard Meerstra, Pjotr Prins.

Germany : Flick Gocke Schaumburg

Matthias Full, Dr. Marcus Oliver Mick, Dr. Barbara Fleckenstein-Weiland, Corina Hackbarth, Christoph Klein; Associates: Sophie Frombeck, Mauritz Müller, Simon Lösel (all Tax)

In its recent judgement in the Nordcurrent Group case (C-228/24), the CJEU has ruled that application of domestic participation exemption regimes can be denied on the basis of the General Anti-Abuse Rule of the Parent Subsidiary Directive (PSD).

Takeaways

• The judgement could have effect on the applicability of domestic participation exemption regimes, like the Netherlands.
• Once again, the CJEU ruled that for an arrangement to qualify as abusive, this requires an assessment of all facts and circumstances.
• With the judgement, it has become clear that EU tax abuse has a broader scope than solely conduit companies.
• Given the potential high financial impact of the loss of the Dutch participation exemption regime, we strongly recommend to review existing holding structures and consider the potential impact.

Case

A Lithuanian company (Nordcurrent UAB) received dividends from its UK subsidiary in 2018 and 2019. The local tax authorities in Lithuania refused application of the participation exemption based on the position that there was an abusive situation, as the UK subsidiary qualified as an artificial arrangement, due to lack of substance. Nordcurrent UAB appealed to this position with the Lithuanian court and the case has led to questions from the Lithuanian court towards the CJEU on how to interpret anti-abuse rules in relation to the Parent-Subsidiary Directive.

 The answers from the CJEU to these question provide some new insights and some confirmations, as it ruled that:

(i) The benefits of a domestic participation exemption can be denied if all of the elements of an abusive situation are met.

(ii) All facts and circumstances should be taken into regard when assessing whether an arrangement can be qualifies as abusive, not only the facts and circumstances at the date of the distribution

(iii) For an artificial arrangement to be considered, both a non-genuine arrangement (objective test) AND a tax advantage (subjective test) are required.

 Contact

If you have any questions about how these changes may affect your business, consulting with a tax professional is highly recommended. Please contact Karel Pellemans or Evert-Jan Spoelder if you would like to receive further information.

We’re joining forces with our Luxembourg member firm ATOZ  for our very first Tax briefing in Amsterdam, taking place on Tuesday, 6 May 2025 from 4-5.30pm, followed by drinks. Registration opens at 3:30pm. Venue: De Veranda, Amstelveenseweg 764, Amsterdam.

Being the largest fund centre in Europe, and second in the world, Luxembourg holds an impressive 56% share of the global market for cross-border investment funds.

But when does a Luxembourg investment platform make sense? What are typical investment fund structures? What are the key tax considerations in Luxembourg, and in the Netherlands for specific Dutch investments? And what are the latest developments in Luxembourg?

Our ATOZ Tax Partner and Head of Transfer Pricing, Oliver R. Hoor, and our Tax Partner & Head of Indirect Tax, Thibaut Boulangé, alongside Borgen Tax Partners, Evert-Jan Spoelder and Karel Pellemans, will be answering all these questions during this ATOZ & Borgen Tax briefing.

Event agenda

• Luxembourg as a fund location with a focus on:
  • Dutch investors in Luxembourg funds
  • Options for Dutch PE houses
  • Dutch portfolio companies owned by a Luxembourg fund
• Typical Luxembourg fund structures
  • Real estate investments
  • Infrastructure investments
  • Private equity investments
  • Private debt investments
• Important tax considerations, including substance
• Important VAT considerations
• Recent developments in Luxembourg

Register here

Key Objectives of DAC9
DAC9 is designed to complement the existing Pillar Two Directive, which ensures a global minimum tax rate of 15% for MNEs and LSDGs. The primary goal of DAC9 is to facilitate compliance by introducing a centralized filing system. This allows MNEs to submit a single top-up tax information return at the group level, rather than multiple filings across different EU Member States. ​

Standardized Reporting Framework
To achieve uniformity and reduce administrative burdens, DAC9 introduces a standardized form aligned with the Global Anti-Base Erosion (GloBE) Information Return developed by the OECD/G20 Inclusive Framework. This form mandates MNEs and LSDGs to report specific tax-related information in a consistent format, simplifying the filing process and enhancing the efficiency of information exchange among EU tax authorities. ​

Information Exchange Mechanism
Beyond standardized reporting, DAC9 establishes a framework for the automatic exchange of tax information between Member States. This system ensures that once an MNE submits its top-up tax information return in one Member State, the relevant data is disseminated to tax authorities across other Member States where the MNE operates. This approach promotes transparency and reduces the need for redundant filings. ​

Implementation Timeline
Member States are required to transpose DAC9 into their national laws by December 31, 2025. MNEs are expected to file their first top-up tax information returns by June 30, 2026, as stipulated under the Pillar Two Directive. Subsequently, tax authorities must exchange this information with their counterparts in other Member States by December 31, 2026. ​

Implications for Multinational Enterprises
The introduction of DAC9 signifies a substantial shift towards simplifying tax compliance for MNEs within the EU. By centralizing the filing process and standardizing reporting formats, MNEs can anticipate reduced administrative burdens and enhanced clarity in their tax obligations. Furthermore, the automatic exchange of information fosters a more transparent tax environment, aligning with global efforts to combat tax avoidance and ensure fair taxation.

Practical Steps for Compliance
MNEs should proactively assess their current tax reporting processes to align with the forthcoming DAC9 requirements. This includes:​

• Identifying the Appropriate Filing Entity: Determining whether the ultimate parent entity or a designated subsidiary will be responsible for submitting the centralized top-up tax information return.​
• Adapting to the Standardized Form: Ensuring that internal tax reporting systems can capture and report data in accordance with the new standardized format introduced by DAC9.​
• Engaging with Tax Authorities: Establishing communication channels with the tax authorities in the Member State of filing to ensure compliance and address any uncertainties during the transition period.​

By undertaking these steps, MNEs can effectively navigate the changes introduced by DAC9 and maintain compliance with EU tax regulations.​

Conclusion
DAC9 represents a pivotal development in the EU’s efforts to harmonize tax reporting obligations for multinational enterprises. The directive not only simplifies compliance but also strengthens the framework for tax transparency and cooperation among Member States. As the implementation deadline approaches, it is imperative for MNEs to adapt their tax strategies and reporting mechanisms to align with the new requirements, thereby ensuring seamless compliance and contributing to a fairer tax landscape within the EU.​