The Netherlands to amend its dividend tax position

Publication September 2016


On 20 September 2016 – 2017 Budget Day – the Dutch State Secretary for Finance submitted a letter to the lower house of parliament on the proposed amendment to the Dutch dividend tax regime.  He proposes to amend the Dutch dividend tax act to eliminate the difference between Dutch cooperatives and Dutch private companies (BV) and public companies (NV).  It introduces a liability to dividend  tax for so-called holding cooperatives but at the same time relaxes the current regime applicable; to BVs and NVs by allowing BVs and NVs to make distributions free of dividend tax if their shareholders reside in a treaty country. If enacted,  the changes are intended to become effective as from January 1, 2018, at the latest.


The cooperative is a specific legal entity that is used in international holding structures to prevent Dutch dividend tax being levied on distributions. As opposed to BVs and NVs, the cooperative is not subject to dividend tax as its capital is not divided into units or shares. Because there are no specific legal grounds for this difference, the Dutch State Secretary for Finance proposes to eliminate it.


His letter first sets out the different types of cooperatives and their uses.  Here, the Dutch State Secretary for Finance distinguishes between so-called (active) “real cooperatives” and (passive) “holding cooperatives”. He subsequently proposes to amend the dividend tax regime for holding cooperatives so that their  treatment will be put at par with that of BVs and NVs:

  1. No dividend tax will be levied from  distributions if a shareholder in a BV or NV or member in a cooperative generally owns a stake of 5% or more and a double tax treaty is in place between the country of the shareholder or member and the Netherlands (except in abusive situations).
  2. A 15% dividend tax will be levied from distributions if (a) a shareholder or member generally owns a stake of less than 5% or (b) a shareholder or member owns a stake of 5% or more but resides in a non-treaty-jurisdiction (i.e. a country with whom the Netherlands does not have a double tax treaty).
  3. The proposed dividend tax law will be more strict for holding cooperatives that lack sufficient substance in the Netherlands, regardless of where their members reside. These members can only benefit from a reduction of dividend tax pursuant to a tax treaty (if the actual member can claim relief) or, for members resident in the EU, the Parent Subsidiary Directive (assuming that the conditions are met).

Concluding remarks

As this letter is only an announcement of a future change, these developments are subject to change. We will keep you updated on further developments. Nonetheless, a review should be made of any structures that uses  cooperatives The amendment may allow you to simplify such structures. We are obviously more than happy to assist you in reviewing your structures to ensure their effectiveness.

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