Tax Policy Reforms 2018 by OECD

Author:OECD
Language: eng
Format: epub
Tags: Economics/Taxation
Publisher: OECD Publishing
Published: 2018-09-04T16:00:00+00:00

The Netherlands has increased the scope of its dividend withholding tax exemption

The Netherlands has expanded the scope of the dividend withholding tax exemption. Until 2018, dividend tax did not have to be withheld if the recipient was a member of the EU or the European Economic Association (EEA). As of 2018, the exemption from dividend withholding tax was expanded to third countries that have concluded a tax treaty with the Netherlands that contains qualifying provisions relating to dividend withholding taxes. This implies that outgoing dividend payments are exempt from withholding taxes in situations where a treaty exists.9 However, the Netherlands has announced the introduction of a withholding tax on outgoing dividends in situations of abuse or in cases of distributions to low-tax jurisdictions, which should become effective in 2020. This provision would also apply to interest and royalty payments as of 2021.

Additionally, it has been proposed to align the treatment of Dutch holding cooperatives with that of public and private limited liability companies. As a result Dutch holding cooperatives are in principle also obliged to withhold a 15% dividend withholding tax on dividend payments.

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