Vereniging VNO-NCW

THE CONFEDERATION OF NETH ERLANDS INDUSTRY AND EMPL OYERS IS A MEM BER OF BUSINESSEUROPE AND ICC Dear madam, dear sir, VNO-NCW welcomes the opportunity to provide input to the European Commission’s initiative to evaluate the Anti-Tax Avoidance Directive (ATAD). The Dutch business community recognizes the importance of fair and transparent taxation and supports international initiatives aimed at combating tax avoidance. ATAD has played a significant role in countering international tax planning and tax avoidance, which is crucial for maintaining a level playing field within the internal market. It is positive that ATAD is now being evaluated. This creates an opportunity to also consider the unforeseen effects that the implementation of this regulation brings. Unmistakably, the international tax landscape has changed significantly since the adoption of ATAD in 2016.

…brings. Unmistakably, the international tax landscape has changed significantly since the adoption of ATAD in 2016. In this context, the implementation of the Directive on the global minimum level of taxation in the Union can be considered a gamechanger. The Dutch business community therefore calls for an evaluation focused on the question whether the ATAD rules are still relevant and appropriate. Due to the global minimum tax, some ATAD rules might have become redundant.

…rules are still relevant and appropriate. Due to the global minimum tax, some ATAD rules might have become redundant. Where rules are still relevant, the evaluation should also focus on how to promote a much more uniform approach that is consistent across all Adres/Address 'Malietoren' Bezuidenhoutseweg 12 Den Haag Postadres/Postal Address Postbox 93002 2509 AA The Hague Telefoon/Phone +31 (0)70 349 03 49 Telefax/Fax +31(0)70 349 03 00 R e f e r e n c e n u m b e r 24-122738 T h e H a g u e September 11, 2024 T e l e p h o n e n u m b e r +31703490432 E - M a i l [email protected] S u b j e c t Response to the call for evidence for an evaluation on ATAD European Commission Ref. Ares(2024)6450759 - 11/09/2024 Blad 2 Member States. This will not only create a fairer tax environment but also strengthen the internal market, enabling European companies to better compete globally.

…fairer tax environment but also strengthen the internal market, enabling European companies to better compete globally. The Letta report emphasizes the need for a stronger and more integrated internal market, where regulatory harmonization is essential. The report also points to the need to reduce regulatory burdens within the internal market. The Dutch business community urges that the evaluation of ATAD addresses the need to reduce regulatory pressure as ATAD has led to a significant increase in administrative burdens for businesses, particularly (but not only) those with cross-border activities. Interest Deduction Limitation Rules With the advent of an effective global minimum tax, the risk of base erosion through excessive interest deductions should be considered a thing of the past.

…minimum tax, the risk of base erosion through excessive interest deductions should be considered a thing of the past. The question should be asked to what extent ATAD's interest deduction limitation rules still contributes to combating tax avoidance and, if so, whether this instrument remains proportional given its negative economic effects and the high administrative burden. The restriction on interest deductions impacts investment willingness in the EU, which also hinders necessary investments in the major transitions (for example climate and energy). This has become even more urgent as interest rates for business loans have drastically increased since 2016. In addition, the procyclical nature of the interest deduction limitation creates many challenges for businesses. This uncertainty hampers investments in the EU especially in challenging economic times.

…challenges for businesses. This uncertainty hampers investments in the EU especially in challenging economic times. The implementation of the interest deduction limitation rules currently varies significantly between Member States, leading to a form of market distortion. These variations present a challenge for companies operating in multiple jurisdictions and can result in high compliance costs. This also has a dampening effect on investments and economic growth, undermining the EU's competitive position, especially as the treatment of genuine interest costs outside the EU is generally more lenient. The limitation on the deduction of interest can also have unintended negative consequences for organizations that are not necessarily the target group, such as social housing corporations. This issue should also be addressed.

…that are not necessarily the target group, such as social housing corporations. This issue should also be addressed. Controlled Foreign Company rules Another concern is the overlap between the Controlled Foreign Company (CFC) rules and the global minimum tax. Businesses subject to both regimes face a double administrative burden, having to comply with both CFC rules and the global minimum tax rules. This Blad 3 raises the question of whether CFC rules remain necessary for businesses already subject to the global minimum tax. Although CFC rules and global minimum tax rules differ, a thorough reassessment of the relevance and effectiveness of CFC rules across the EU would make sense. We remain available for any further dialogue and clarification. Kind regards, Dirk-Jan Sinke Head of Tax Policy

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Call for evidence regarding review GDPR 2024 Input from VNO-NCW/MKB Nederland The Dutch ConfederaƟon of Dutch Industries and employers (VNO-NCW/MKB-Nederland) welcomes the opportunity to provide input for the evaluaƟon of the General Data ProtecƟon RegulaƟon (GDPR) 2024. We underwrite the input provided by our umbrella associaƟon Business Europe. In addiƟon, we take the opportunity to highlight some important issues from the specific perspecƟve of businesses in the Netherlands. We appreciate the effort the EC puts into the review of the GDPR. Many companies and other organisaƟons, big and small, take part in the global digital economy, an economy that does not recognize borders.

…other organisaƟons, big and small, take part in the global digital economy, an economy that does not recognize borders. As a result of (fast) technological developments and data flows the digital economy will be able to expand in the near future and, for instance, making it possible for SMEs to take their part in the digital economy which is an essenƟal development for their resilience and sustainable development. New European legislaƟon iniƟaƟves such as the AI Act, Data Act, Digital Services Act, Digital Market Act and Data Governance Act have the ambiƟon to empower such growth and strengthen the posiƟon of Europe in the global market. We welcomed the introducƟon in 2016 of the harmonized European Act for the protecƟon of personal data. The harmonized GDPR intends to unify rules in the European Union to protect personal data.

…protecƟon of personal data. The harmonized GDPR intends to unify rules in the European Union to protect personal data. The open and technical neutral norms intend to offer the agility to adapt the rules to future (technological) developments. However, in pracƟce, much of the intended harmonizaƟon and adapƟveness does not come to pass. Businesses are unfortunately sƟll too oŌen confronted with different naƟonal interpretaƟons of the GDPR as well as diverging naƟonal implementaƟon of the GDPR. This makes the implementaƟon of the GDPR even more complex and leads to legal uncertainty for businesses, not least for SMEs. This also leads to high (unnecessary) administraƟve costs as well as fragmentaƟon within the European Union which has a negaƟve effect on the intended level playing field and weakens the EU's posiƟon in the global market (for instance regarding AI). Summary

…the intended level playing field and weakens the EU's posiƟon in the global market (for instance regarding AI). Summary 1. A holisƟc approach is needed. To protect personal data while strengthening the economic posiƟon of the Netherlands and Europe, it is important not to view protecƟon of personal data in isolaƟon, but in relaƟon to other fundamental rights and legiƟmate interests. We recommend making targeted amendments and include explicit clarificaƟons in the GDPR. 2. Underline the no-hierarchy basis of ArƟcle 6 3. ClarificaƟon specific needs SMEs in GDPR 4. MiƟgate backlogs -include clarificaƟon in the GDPR that DPAs should make use of the whole toolkit 5. Data Subject rights – a proporƟonate approach is key 6. EU Training program DPOs to create level playing field 7. Promote Codes of Conduct – include clarificaƟon facultaƟve character of appoinƟng monitoring body arƟcle 42

…field 7. Promote Codes of Conduct – include clarificaƟon facultaƟve character of appoinƟng monitoring body arƟcle 42 8. FragmentaƟon in EU - 9. InternaƟonal transfers – trusted free flow of data 10. GDPR and innovaƟon / new technologies – alignment is needed between the GDPR and new EU legislaƟve proposals We would like to take this opportunity to provide input regarding the review of the GDPR: General comments What is your overall assessment (benefits/challenges, increase in trust Ref. Ares(2024)927179 - 07/02/2024 and awareness, etc.) of the application of the GDPR since May 2018? Are there priority issues to be addressed? I.

…awareness, etc.) of the application of the GDPR since May 2018? Are there priority issues to be addressed? I. ProtecƟon of personal data is not an island To protect personal data while strengthening the economic posiƟon of the Netherlands and Europe, it is important not to view protecƟon of personal data in isolaƟon, but in relaƟon to other fundamental rights and legiƟmate interests. A holisƟc approach is needed. Factors as geopoliƟcal implicaƟons, effect on the internal market (level playing field) and impact on innovaƟon need to be considered. The risk-based approach which is central to the GDPR needs to be underlined and reinforced. The assessment of whether and to what extent a data processing acƟvity poses a risk – and how it can be miƟgated - must be based on all relevant, objecƟve, and realisƟc factors.

…acƟvity poses a risk – and how it can be miƟgated - must be based on all relevant, objecƟve, and realisƟc factors. Only in finding the right balance can the Netherlands, and by extension Europe, expand and strengthen its strategic posiƟon in areas such as ArƟficial Intelligence (AI). The laƩer is necessary to create the necessary interdependencies with other (like-minded) countries. However, more and more the DPAs lean towards a zero- risk approach. The Dutch DPA's repeatedly restricƟve interpretaƟon of the GDPR is of concern. For example, its too strict interpretaƟon of the legal processing ground legiƟmate interest. With this interpretaƟon the Dutch DPA has overstepped its powers under the General Data ProtecƟon RegulaƟon (GDPR) and goes beyond the intent of the EU legislators and the interpretaƟon of the EUCJ.

Data ProtecƟon RegulaƟon (GDPR) and goes beyond the intent of the EU legislators and the interpretaƟon of the EUCJ. To strengthen the risk-based and agile approach of the GDPR, we recommend making some targeted adjustments and include explicit clarificaƟons in the GDPR as well as in its accompanying guidelines. II. MiƟgate backlogs We urge the Commission to address the current backlog in the licensing and approval procedures of the DPAs. There are now backlogs of 9 years in the Netherlands for geƫng your BCR approved. This is not workable and as a consequence organizaƟons rely on SCC’s which is not necessarily a beƩer safeguard for internaƟonal data flows. We recommend including clarificaƟon in the GDPR that resources need to be used for all tasks of the DPA and that all their tasks assigned to them under the GDPR receive sufficient aƩenƟon.

…to be used for all tasks of the DPA and that all their tasks assigned to them under the GDPR receive sufficient aƩenƟon. Questionnaire EC: Exercise of data subject rights From the controllers and processors’ perspective: please provide information on the compliance with the data subject rights listed below, including on possible challenges (e.g. manifestly unfounded or excessive requests, difficulty meeting deadlines, identification of data subjects, etc.).

…manifestly unfounded or excessive requests, difficulty meeting deadlines, identification of data subjects, etc.). IdenƟty verificaƟon data subject We recommend to clarify in the GDPR that the idenƟty of the data subject can be reliably verified - in line with the principles of the GDPR - by requesƟng – via a protected route – a copy of the ID of the party requesƟng access to personal data (without the photo and BSN being visible) for verificaƟon purposes which require a high degree of certainty that such person is indeed the data subject it states to be. Taking into consideraƟon that the copy of the ID is deleted once the idenƟty has been duly verified. Such a verificaƟon process can be necessary to prevent data from being shared with unauthorized third parƟes (such as ex- partners).

…process can be necessary to prevent data from being shared with unauthorized third parƟes (such as ex- partners). In our opinion, this verificaƟon method guarantees proper idenƟficaƟon without prejudice to the right of data subjects to contact an organizaƟon freely and without excessive processing taking place in view of the miƟgaƟng measures menƟoned. This approach is also in line with the decision of the Dutch Council of State dated 9 December 20201, in which the Council does not consider the principle that a copy of an idenƟty document is required with a request for access to be unreasonable. SpecificaƟon of Access Rights We recommend to clarify that the controller does not have to comply with overly broad and unspecific requests for access.

…recommend to clarify that the controller does not have to comply with overly broad and unspecific requests for access. This is in line with the principle of proporƟonality (and with established case law in the Netherlands which takes the principle of proporƟonality into account.2) No access to raw data We recommend to clarify in the GDPR that the data subject does not have a right to access the raw data it provided. This relates to the decision of the European Court of JusƟce (YS)3. In this decision, the European Court of JusƟce stated in recital 58: “Therefore, in so far as the objecƟve pursued by that right of access may be fully saƟsfied by another form of communicaƟon, the data subject cannot derive from either ArƟcle 12(a) of DirecƟve 95/46 or ArƟcle 8(2) of the Charter the right to obtain a copy of the document or the original file in which those data appear.

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