Unrealized losses also caught by anti-loss-trading rule

On 11 September 2026, the Dutch Supreme Court handed down a judgment on the Dutch corporate income tax provision that targets ‘trading in loss-making companies’ (art. 20a Dutch Corporate Income Tax Act). As a general rule, this anti-loss-trading provision means that losses can no longer be set off against future profits once the ultimate interest in the taxpayer changes by 30% or more. For a company limited by shares, such as an NV or BV, this refers to a change of 30% or more in its shareholder base. The general rule is subject to a number of exceptions. Certain specifically defined changes in the ultimate interest are left out of account, and losses may still be carried forward, subject to conditions, provided that a number of tests are met.

The anti-loss-trading provision also applies to unrealized losses

The ruling of the Dutch Supreme Court turns on a fundamental question: what exactly counts as a ‘loss’ for the purposes of the Dutch anti-loss-trading provision? Does it cover realized losses only? Or does it cover both realized losses and unrealized losses that exist at the time of the change in shareholders? The answer matters a great deal in practice. If unrealized losses also fall within the scope of the provision, the impact is far more significant, because the amount of losses potentially caught by the provision is then much larger.

The case concerned a BV whose shares were transferred to third parties at the end of 2015. The BV owned properties that were worth less than the value at which they were carried on its tax balance sheet (an unrealized loss). In 2017, the BV sold the properties and realized a tax loss of approximately EUR 4.3 million on them. According to the Dutch Supreme Court, that loss realized in 2017 falls within the scope of the Dutch anti-loss-trading provision. The reasoning behind the ruling is straightforward: a loss that built up while the company was still owned by its former shareholders should not be used to reduce profits earned after the takeover, because those later profits benefit the new shareholders. For the record: although this case concerned unrealized losses on real estate, the ruling of the Dutch Supreme Court applies to all types of assets.

BDO’s view

We can see the reasoning behind this decision of the Dutch Supreme Court, but in our view it would have been more appropriate to hold that unrealized losses fall outside the anti-loss-trading provision. Unfortunately, that is not the route the Court took.

So what does this mean in practice? Above all, that any actual or intended change in the ultimate interest calls for an even more critical assessment of the extent to which losses remain available for set-off. It should also be borne in mind that this ruling of the Dutch Supreme Court makes the anti-loss-trading provision even more complex to apply. It raises a whole range of questions that current legislation simply does not answer. Valuing assets, and documenting those valuations carefully and in good time, therefore becomes all the more important. Your BDO adviser can help you assess what this ruling may mean for your situation.