Introduction of dividend withholding tax

The Dutch Cabinet in a recent announcement has confirmed the introduction – supplementarily to withholding tax on interest and royalties – of a withholding (or retention) tax on dividend flows destined for tax havens. The effective date of the withholding tax on interest and royalties has been fixed at 2021 whereas that for dividend withholding tax is currently scheduled for 2024. Dividend withholding tax is to be levied on all flows of funds to so-called non-cooperative tax jurisdictions where profits are taxed at less than nine percent and to all tax jurisdictions the EU has blacklisted, irrespective of whether the Netherlands does or does not entertain a tax treaty with the recipient country.

The Cabinet is committed to finalise the particulars of the dividend withholding tax measures before its current term is up, so as to allow the Tax and Customs Administration enough time to see to the implementation of the new regime.

Dutch version: Kabinet kondigt bronbelasting op dividenden aan