You are here:
29 September 2020 / news

Netherlands: consultation additional withholding tax on dividends to low-taxed jurisdictions

The Dutch government has published, for consultation, a draft legislative proposal to introduce an additional withholding tax on dividends to low-taxed jurisdictions as of 1 January 2024.

The proposal was already announced some time ago (see our previous Tax Flash) and is a re-introduction of a previous proposal that was never adopted (see our 2018 Tax Flash). The current proposal includes less restrictive measures than the previous proposal.

The proposal entails an additional withholding tax on dividend payments to certain low-taxed jurisdictions and/or jurisdictions included on the EU-blacklist (jointly referred to as LTJs). Contrary to the existing dividend withholding tax (DWT), the additional withholding tax (the Additional WHT) would only apply in relation to dividends to shareholders that have a “controlling interest” (in general: >50% of the voting rights). Furthermore, the Additional WHT will apply to payments by all cooperatives (currently only distributions by so-called holding cooperatives are subject to DWT). The Additional WHT will in principle only apply to direct dividend distributions to LTJs, although there are certain exceptions (e.g. in situations considered “abusive” or for payments to hybrid entities). The rate of the Additional WHT will be the main corporate income tax rate (currently: 25%).

Three important changes have been included compared to the previous proposal:

  • In case Additional WHT is due, DWT on the same distribution may be 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 draft proposal is open for consultation until 23 October 2020. The formal legislative proposal is expected in Q1 2021.

Contact

We will keep you updated on further developments. Should you have queries, or would you like us to assist you in submitting a response to the consultation document, please contact your trusted adviser at Loyens & Loeff.



Prinsjesdag 2021 Indirect Tax - Vatgoed - ENG

Political agreement to amend the 2022 Tax Plan

Increase headline rate corporate income tax and tightening of the earnings stripping rules read more
Prinsjesdag 2021 Tax Flash ENG

Dutch Budget Day 2021: main changes for corporate taxpayers

On 21 September 2021, the Dutch Ministry of Finance submitted the 2022 Dutch Budget to parliament. Read the main changes for corporate taxpayers. read more
EU Court of Justice orders another judicial State aid review of Belgian Excess Profit Rulings

EU Court of Justice orders another judicial State aid review of Belgian Excess Profit Rulings

On 16 September 2021, the Court of Justice of the European Union issued its judgement on whether the Belgian excess profit rulings could qualify as State aid... read more