Background of public consultation

The Dutch government has researched various forms of dividend stripping in a Dutch context (by using security lending, put options and call options) and assessed how the current Dutch anti-dividend stripping legislation can be amended in order to counter dividend stripping more effectively. Six alternative measures have been identified and are currently being considered.

The Dutch government acknowledges that any (proposed) tightening of tax legislation will need to be considered in the context of the impact that it will have on the stock market and bona fide business operations. The measures have therefore been published for public consultation, along with questions of the Dutch government to interested parties on, among others, the impact, operability and potential variations on the measures.

Anti-dividend stripping legislation

Dutch dividend withholding tax (DWT) legislation contains a generic anti-dividendstripping rule which includes a negative definition of beneficial ownership. In short, it provides that a credit, reduction or refund of DWT is not available for persons that received a certain dividend but are not the beneficial owner of that dividend.

At the time of introduction of this anti-dividend stripping rule, in 2001, the Dutch government acknowledged that not all forms of dividend stripping would be countered, especially in view of the burden of proof that rests with the Dutch tax authorities in this respect.

The Dutch government considers it undesirable that it is still possible to circumvent payment of DWT via various forms of dividend stripping. It is therefore now considering alternative measures to counter dividend stripping more effectively.


In addition to legal sustainability, the Dutch government considers the following parameters relevant in assessing the measures against dividend stripping:

  • enforceability (for the Dutch tax authorities as well as parties in the market);
  • impact on the stock market and consequences for citizens and businesses; and
  • tenability under EU and international law.


The Dutch government has identified six alternative measures which have been published for public consultation. The Dutch government notes that Alternatives D, E and F may, on a stand-alone basis, be insufficiently effective, but may be implemented along with (one of) the other alternatives.

Alternative A – Requirement of legal title and economic interest for credit, reduction or refund
Alternative A aims to counter dividend stripping by requiring that the person that requests a credit, reduction or a refund of DWT proves that he holds the legal title as well as economic interest in the shares.

Alternative B – Introduction of holding period   
Alternative B entails a change to the concept of beneficial ownership in Dutch DWT legislation, based on which a person will only be considered the beneficial owner of a dividend if it holds the legal title to and economic interest in Dutch shares for a certain period prior to and after dividend record date. The Dutch government mentions the possibility to combine the introduction of a holding period with a counter evidence rule and/or a  threshold relating to the amount of the dividend.

Alternative C – Restriction of credit and refund possibilities
Based on this alternative, a credit or refund of DWT will no longer be allowed to the extent it exceeds the Dutch corporate income tax due on the dividend received after deduction of costs related to the dividend, which include considerations paid in connection with the dividend received at group level. Such costs would also include dividend compensation payments in respect of a short position in such shares. The Dutch government mentions the possibility to combine the restriction of credit and refund possibilities with a threshold relating to the level of costs relative to the size of the dividend. Alternative C would not apply to pension funds.

Alternative D – Documentation requirements
Alternative D comprises documentation requirements which aim at securing that only one party is eligible for a credit, reduction or refund of DWT. Options include verification of issuance of dividend vouchers, mandatory registration of dividend vouchers with the Dutch tax authorities and showing proof of dividend vouchers in order to obtain a credit, reduction or refund of DWT, as well as extending the requirements for dividend vouchers (to include ex-dividend date and dividend record date) and introducing reporting requirements for stockbrokers.

Alternative E – Codification of dividend record date
Pursuant to a Decree of the State Secretary for Finance, the person who is the legal owner of the shares and who is legally entitled to the dividend on dividend record date is considered the legal recipient of the dividend for Dutch DWT purposes. The dividend record date is set at the ex-dividend date plus two trading days. Alternative E aims at codification of this rule in the Dutch DWT legislation, to ensure that this rule applies in domestic as well as in international situations.

Alternative F – Related party definition
Alternative F comprises the introduction of a related party definition in the anti-dividend stripping legislation in order to counter dividend stripping within groups. Based hereon, a person will be deemed to have the full economic interest in Dutch shares if it, alone or together with related parties, owns the full economic interest in Dutch shares.

Final remarks

The public consultation closes on 26 January 2022. The Dutch government expects to revert to the Lower House on the outcome of the public consultation in the spring of 2022.

We will keep you informed of further developments. For further information, please contact your trusted advisor, also if you would need assistance for a response on this consultation.