Dutch dividend withholding tax exemption broadened previous message

Dutch dividend withholding tax exemption broadened

The Dutch Ministry of Finance has announced to broaden the exemption from dividend withholding tax.

A full exemption of 15% Dutch dividend withholding tax would be available:

  • for a parent company (shareholder) of the Dutch distributing entity that has concluded a tax treaty with the Netherlands; and
  • there is no abuse of law

Currently the exemption is only available for parent companies located in the EU or EER or if the tax treaty provides for a 0% tax rate.

There is for instance abuse of law if the Netherlands is used to channel dividends to non-treaty countries, including tax havens.

The new changes will most likely be introduced as per January 1, 2018. Since draft legislation is not yet published, we have not yet a detailed view how the anti-abuse measure will be implemented. It is likely that the anti-abuse measures will be aligned with the anti-abuse provision in the EU Parent Subsidiary directive.

Harmonisation Coop and Dutch limited liability company (BV)

The difference in tax treatment of dividend distributions of a Dutch Coop and a BV will be harmonised. This means that distributions of a Coop will become subject to Dutch dividend withholding tax. Nevertheless, the Coop will also benefit from the same exemption as mentioned in the previous paragraph.

If you have any questions or comments, please contact Guido van Asperen (guido.van.asperen@fisconti.nl or +31 615041623).

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