Withholding taxes


Dividend distributions (including liquidation payments, repayments of capital and stock repurchases) are generally subject to 15% Dutch dividend withholding tax. This rate also applies to interest paid on qualifying hybrid loans, since such loans are deemed to be equity of the debtor.

An exemption from Dutch dividend withholding tax also applies to a beneficiary in another EU member state. According to Dutch dividend withholding tax legislation (correspond­ing with the Parent-Subsidiary Directive), any dividends paid by a Dutch resident company to a beneficiary are exempt from withholding tax if the beneficiary:

  • is the beneficial owner of the dividends;
  • is considered to be resident of an EU or EEA member state or a country with which the Netherlands has concluded a bilateral tax treaty that includes a dividend taxation clause (and not a resident of a third country based on an applicable tax treaty); and
  • has an interest of at least 5% in the Dutch company paying the dividends, which qualifies for the application of the Dutch participation exemption had the beneficiary been resident of the Netherlands.

The exemption is not granted in the event of abusive situations, whereby the beneficiary:

  • holds the interest with the main aim or one of the main aims to avoid the levying of taxation at the level of another party; and
  • the payment is made under an artificial arrangement or series of such artificial arrangements lacking any commercial substance.

The 15% dividend withholding tax rate may be reduced under a bilateral tax treaty concluded by the Netherlands and the jurisdiction of which the beneficiary is considered a resident.


An exemption or reduction of Dutch dividend withholding tax is not granted in the event of generally artificial arrangements that have the objective to obtain the aforementioned tax exemption (dividend stripping).


As a general rule, profit distributions by a Dutch cooperative are not subject to Dutch dividend withholding tax. However, due to the legislator’s ongoing objective to combat the abuse of the Dutch tax system, certain payments made by a so-called “qualifying holding cooperative” (in Dutch: houdstercoöperatie) are subject to dividend withholding tax. A cooperative qualifies as such if its activities in the year preceding the distribution mainly consisted of:

  • the holding of participations that qualify for the participation exemption (i.e. interests of at least 5%); or
  • the (in)direct financing of related parties.

If these conditions are met the qualifying holding cooperative is obliged to withhold dividend withholding tax in respect of payments made to members with an interest of at least 5%. Payments made to members with an interest below this threshold are not subject to dividend withholding tax unless these members hold a qualifying interest through a related party.


A bill for a conditional dividend withholding on exit has been has been submitted in 2020 and is currently still pending. In short, the bill introduces an exit tax for Dutch dividend withholding tax purposes in relation to a deemed dividend distribution occurring as a result of certain cross-border reorganisations, such as:

  • a cross-border transfer of the Dutch taxpayer’s place of effective management as a result of which the taxpayer is no longer considered a resident of the Netherlands for dividend withholding tax or tax treaty purposes;
  • a cross-border legal merger whereby the Dutch taxpayer merges with and into a foreign company;
  • a cross-border demerger whereby the Dutch taxpayer demerges its assets and liabilities into a foreign company; and
  • a cross-border share-for-share transaction whereby a foreign company acquires at least 50% of the Dutch taxpayer’s voting rights.

The deemed dividend distribution and hence the exit tax applies if either (i) the foreign jurisdiction does not have a dividend withholding tax that is comparable with the Netherlands, or (ii) the foreign jurisdiction does have such dividend withholding tax, but provides for a step-up in basis to the fair market value of the assets and liabilities involved, effectively resulting in a dividend withholding tax exemption on the profits accumulated up to the foregoing cross-border reorganization. If adopted the bill will have retroactive effect from 18 September 2020.


Since 1 January 2021 a 25% withholding tax on interest and royalty payments may apply in the Netherlands as a result of the implementation of the Dutch Withholding Tax Act 2021. The withholding tax typically applies if the beneficially entitled recipient of the interest or royalty:

  • holds a qualifying interest in the Dutch company or permanent establishment paying the interest or royalty (in short 50% of the voting rights but other forms of control may also qualify); and
  • is considered a tax resident of certain designated low tax and non-cooperative jurisdictions (or participates through a permanent establishment in such jurisdiction).

Special attention is required if hybrid entities are involved or in case of back-to-back arrangements. The rules also target abusive situations. The applicable withholding tax rate is 25%.

A bill has been submitted to extend the application of these rules to dividend payments as from 1 January 2024. This bill is still subject to approval by Dutch parliament.


Sylvia Dikmans
Partner Tax



Jeroen van Mourik
Partner Tax



You can download a PDF version of our guide Doing business in the Netherlands here. All chapters are included.


Last updated September 2021