René van Eldonk
(tax partner) and Steven den Boer (senior tax associate) at
Simmons & Simmons in Amsterdam.
From a regulatory perspective,
additional tier 1 capital (AT1) must meet the EU-wide
regulatory requirements set out in the Capital Requirements
Directive and the Capital Requirements Regulation (CRR),
jointly known as CRD IV. From a tax perspective, the treatment
of AT1 for banks and certain investment firms is not yet
consistent across all European jurisdictions. Needless to say,
today’s global banking industry requires a
level-playing field across the EU, although this could take
some time to achieve.
The Netherlands has now become one
of the first jurisdictions to confirm the favourable tax
treatment of AT1 issued by banks.
Tax treatment of
AT1 for banks
For Dutch tax purposes, common equity tier 1 (CET1) is
treated as equity and tier 2 is treated as debt. But until
recently, the Dutch tax...