Dividend WHT
NovioTax specialises in the Dividend Tax Act 1965 (DivBel) and the Withholding Tax Act 2021 (Wet BB 2021). Both regimes apply to outgoing payments (dividends, interest and royalties) to foreign beneficiaries. The rates vary from 15% (DivBel) to 25.8% (Wet BB 2021). Since 2024, the Wet BB 2021 has also applied to dividend payments to countries with low taxes and in cases of abuse. In practice, it revolves around the place of residence of the ultimate beneficiary (substance and beneficial ownership) and the question of which country has the right of taxation.
Analysing and optimising dividend withholding tax positions
Many clients are based in treaty countries. Tax treaties may provide for reduced rates or exemptions. In addition, Dutch law offers exemptions, for example for active companies, when purchasing own shares or repaying paid-up capital. We assess the complete picture; not only whether a statutory exemption applies, but also whether anti-abuse provisions, such as the principal purpose test (PPT) and national fraus legis rules, lead to a different outcome.
Experience shows that provisions in both laws sometimes conflict with EU freedoms or with (proper) treaty compliance. This offers opportunities for objections, reductions or refunds, but requires up-to-date knowledge of legislation and regulations, policy decisions, the positions of the Dutch Tax and Customs Administration, and case law. We keep track of this knowledge for you and apply it pragmatically. Where necessary, we supervise preliminary consultations or ruling procedures and coordinate these with foreign advisers.
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