Recent amendments Dutch substance requirements

In our November 2017 Blog (#9) we have discussed the impact of the legislative amendments effective from 1 January 2018. The new law introduces a dividend withholding tax (“WHT”) obligation for holding cooperatives. Under the old legislation, such cooperatives, commonly used in international tax structures, were not subject to dividend WHT, except for certain “abusive” situation. The new legislation aims to eliminate the difference between holding cooperatives and public (NV’s) and limited (BV’s) liability companies by imposing the withholding obligation on such cooperatives and to broaden the general exemption from the withholding obligation for public and limited liability companies.

18 Feb. '18 Gert-Jan Hop


As a result of the legislative amendments, which have been adopted by the upper house of the Dutch parliament on 19 December 2017, investors using Netherlands holding companies that currently face challenges in respect of satisfying a number of anti-abuse provisions such as Main Purpose Tests (“MPT”) (Double Tax Avoidance Agreement (“DTAA”) Netherlands – UK and Netherlands – Switzerland), Limitation on Benefits (“LOB”) provisions (DTAA Netherlands – US and the Netherlands – Curaçao tax regulation) or that are faced with 5-10% dividend WHT on participating investments (>10%+) in a Dutch company may check whether they are able to satisfy the new requirements to enable application of the general dividend WHT exemption. As the main test is satisfying the substance requirements, the Netherlands government has recently disclosed the latest extended substance requirements which are listed below.

Gert-Jan Hop

Gert-Jan Hop is a tax lawyer with over twelve years of experience gained in the field of tax advise for larger multinational companies and high net worth individuals.

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