More possibilities for exemption dividend tax
In the bill working on profit it is proposed to reduce the dividend withholding tax from 25% to 15%.
Now the Dutch ministry of finance has announced additional reductions of the dividend withholding tax to avoid conflicts with European law. At this moment dividend payments to foreign companies are sometimes taxed more heavily than dividend payments to domestic companies. These inequalities are now removed. With the modifications the Netherlands also responds to requests from the European Commission.
The additional changes include that pension funds established in another EU member state will become entitled to a refund of Dutch dividend tax. At this moment such refund is only available for Dutch pension funds. The new rules for the refund of dividend withholding tax also apply to other tax exempt entities established in the EU.
It will be also stipulated that a Dutch company does not to withhold dividend withholding tax if the dividend is paid to a company established in another EU member state, if that company holds at least 5% of the shares in the Dutch company. Now this exemption applies only to foreign companies holding a participation of 20% or larger.
