Home > Legal articles > Dutch government gives guidance on dividend withholding tax refund for foreign shareholders
The Dutch State Secretary of Finance has issued, in his executive capacity, a decree outlining his views on the Dutch dividend withholding tax refund for foreign corporate and individual portfolio shareholders of Dutch companies. The decree follows the rulings of the Dutch Supreme Court and the European Court of Justice in Miljoen, Société Général and X. For our article about these rulings. click here. The decree allows foreign shareholders under specific conditions to claim a Dutch dividend withholding tax refund. Foreign corporate and individual portfolio shareholders should investigate whether they can claim a Dutch dividend withholding tax refund based on the decree.
The Dutch Supreme Court rulings were silent on a number of important questions regarding how to draw a comparison between domestic shareholders and foreign shareholders. Unfortunately, the decree does not provide a practical and general solution to these unresolved questions either. Rather, it sets out the Dutch State Secretary of Finance’s views on a number of topics, many of which are debatable from an EU law perspective. Hence, this decree may not put an end to pending cases because taxpayers may continue to pursue diverging positions on these topics.
The decree’s highlights include:
Unrelated to Dutch dividend withholding tax, the decree also provides that foreign individuals who are subject to Dutch income tax on their Dutch portfolio investments – mainly Dutch real estate – are eligible for the tax-free threshold of approximately EUR 25,000 (twice the amount for partners) even though Dutch statutory tax law does not provide for this. In looking at the ECJ rulings, the State Secretary has concluded – in our view correctly – that Dutch statutory tax law violates the EU treaty freedoms in this respect.
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