The Dutch State Secretary of the Ministry of Finance announced a legislative proposal aimed to subject profit distributions by Dutch Coops to dividend withholding tax.

1. www.bakertillyberk.nl
Dutch Coop subject to
dividend withholding tax?
The Dutch State Secretary of the Ministry of Finance announced a legislative proposal aimed
to subject profit distributions by Dutch Coops to dividend withholding tax.
Introduction
The Netherlands is a favorable jurisdiction to
establish holding companies, due to its
extensive double tax treaty network as well
as its national corporate income tax
legislation (providing for a generous
participation exemption). In addition, where
a Dutch limited liability company
(“besloten/naamloze vennootschap”, or
BV/NV) could still be subject to Dutch
dividend withholding tax (“DWT”) a Dutch
Coöperatieve Vereniging (“Coop”) may be
exempt from DWT.
The use of a Coop as holding company has
been subject to more specific anti-abuse
legislation last years. The Dutch State
Secretary of Finance has now also announced
that the different DWT treatment of a BV/NV
and Coop, for similar activities, is not deemed
justifiable.
Legislative proposal
On 27 May, 2016 the State Secretary
announced that a legislative proposal will be
published on Budget Day (September 2016).
This new legislation will aim to take away the
differences between a BV/NV and a Coop as
far as it concerns the DWT treatment and
would effectively subject a Coop to DWT. For
the exact legislation the legislative proposal
needs to be awaited.
It should be noted that also under the new
legislative proposal Coops may still benefit from a
DWT exemption, but for this the details of the
proposal needs to be known.
Entry into force of the legislation
The State Secretary aims the new legislation to
enter into force no later than 1 January, 2018.
Do you have any questions about these
developments? Please do not hesitate to contact
us.
Disclaimer
The above is based on a letter of the State Secretary
to Dutch Parliament that was published on 27 May
2016. The information contained in this Tax Alert is
of a general nature and should not be relied upon as
advice for a particular situation, since the legislative
process is yet to be started. Baker Tilly Berk does not
accept any liability for any action that may be
undertaken or omitted on the basis of the information
contained in this memorandum.
- 7 June, 2016 -