Impact of BEPS Action 5 on Dutch innovation box

In its effort to counter harmful tax practices, in 2013 the OECD introduced the Action Plan on Base Erosion and Profit Shifting (BEPS). The Action Plan is scheduled to be completed by September 2015. The objective of the OECD is that the plan be implemented by member states in the next few years by introducing or tightening (anti abuse) legislation and by revising tax treaties. In July 2014 the OECD published its Action 5 2014 deliverable. A new concept introduced in Action 5 is the so called modified nexus approach (“MNA”). The MNA has the potential to significantly impact IP tax regimes, including the Dutch “innovation box”.