September 28, 2016

The explanatory letter issued by the Dutch government dated September 20 contains information on dividend withholding tax rules applicable to the Dutch structures.

According to the new tax regime, in case enforced, a holding cooperative will be subject to Dutch dividend withholding tax of 15% with respect to profit distributions to a parent company that owns at least 5% in holding cooperative; whereas a holding cooperative, BV and NV will be exempt from Dutch dividend withholding tax, if the parent company is a tax resident in a jurisdiction having double tax treaty with the Netherlands, if further substance requirements are met.

New regulations should be beneficial for large groups of companies having real presence in the jurisdiction of the parent company.

The legislative proposals are still under consideration and subject to possible amendments, until they are approved by the Senate.