A consultation proposal was published in September 2020 (see our Tax Flash). The Proposal does not differ significantly from the consultation proposal, but includes some minor technical changes and clarifications.

In short, the Additional WHT applies to intragroup dividends to certain low-taxed jurisdictions and/or jurisdictions included on the EU-blacklist (jointly referred to as LTJs), in situations considered “abusive” or to hybrid entities. As such, the Additional WHT is levied only in specific circumstances and the revenue budgeted by the government is negligible. The Additional WHT rate will be equal to the main corporate income tax rate (currently: 25%).

The Additional WHT will be integrated in the Withholding Tax Act 2021 (WTA 2021), which currently covers interest and royalty payments only. Accordingly, the provisions regarding taxpayers, affiliation, abuse, hybrid entities and formal aspects will as of 2024 also apply to dividend distributions (see our Quoted).

The Additional WHT applies in addition to the existing dividend withholding tax (DWT). The government proposes to incorporate the Additional WHT in the WTA 2021 in view of their similar scope.

The most important elements of the Additional WHT are:

  • As far as cooperatives are concerned, contrary to the existing DWT, the Additional WHT applies to profit distributions by all cooperatives (only profit distributions by so-called holding cooperatives are subject to DWT).
  • In case Additional WHT is due, DWT on the same distribution is credited.
  • Repayments of share capital and share premium are, subject to certain conditions, not subject to the Additional WHT.
  • Capital gains are not covered by the Additional WHT.
  • The Additional WHT should be paid to the Dutch tax authorities within one month following the end of the calendar year in which the dividend distribution is (deemed to be) made available, whereas any DWT due should be paid within one month after the distribution is made available.

Contrary to the consultation proposal, the Proposal provides that a repurchase of shares as a temporary investment (for instance, to fulfil obligations under a share-based compensation plan) is not subject to the Additional WHT, in line with the treatment for DWT purposes.


We will keep you updated on further developments. For further information, please contact your adviser at Loyens & Loeff.