A bv buys a claim of over €6 million against itself for €2,500. As a result, that claim disappears: after all, you cannot have a debt to yourself. The inspector sees this as a benefit and levies corporate tax on the difference. The bv thinks this is unjustified.
How did this situation arise?
A limited partnership (cv) - a partnership between partners - is managed by a bv. Over the years, that bv buys up all the interests of the other partners. Eventually, the bv is the only remaining partner. There is then no longer any real cooperation: the limited partnership and the bv have effectively become one. The limited partnership had a debt of over €6 million to another group company for management fees. That group company goes bankrupt. The trustee sells the claim to the bv for only €2,500.
Guilt to yourself does not exist
The purchase of the claim creates a special situation. The bv is now both creditor and debtor. You cannot owe a debt to yourself: if you owe €100 to yourself, you cannot claim that amount. Therefore, the debt automatically disappears. In legal terms, this is called ‘debt compounding’. The court ruled that it does not matter that the CV is still registered with the Chamber of Commerce. There is no longer a partnership, so the CV no longer exists as an independent entity for tax purposes.
Release is profit
The bv had a debt of €6 million on its balance sheet. That debt now disappears for €2,500. The difference is a benefit. The inspector taxes this as remission profit. The bv tries to get out of this with various arguments. It argues that the release should not be taxed because the loan had special features. The court rejects this. The bv did not submit a loan agreement showing those special features. The appeal to previously made agreements with the tax authorities also fails, because the bv cannot prove that those agreements were actually made.