Menu
  • Locations
  • About Us
  • Services
  • Experts
  • News
  • Knowledge
  • Culture & Career
  • Locations
  • Search
  • Press
  • Events & Webinars
  • CI Guide
  • Contact
  • Albania
  • Angola
  • Argentina
  • Armenia
  • Australia
  • Austria
  • Bangladesh
  • Belarus
  • Belgium
  • Benin
  • Bolivia
  • Bosnia & Herzegovina
  • Brazil
  • Bulgaria
  • Burkina Faso
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Chile
  • China
  • Colombia
  • Costa Rica
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Estonia
  • Finland
  • France
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Greece
  • Guatemala
  • Guinea
  • Honduras
  • Hong Kong
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iran
  • Iraq
  • Ireland
  • Israel
  • Italy
  • Ivory Coast
  • Japan
  • Kazakhstan
  • Kenya
  • Korea
  • Kyrgyzstan
  • Laos
  • Latvia
  • Lithuania
  • Luxembourg
  • Macao
  • Macedonia
  • Madagascar
  • Malaysia
  • Mali
  • Malta
  • Mauritius
  • Mexico
  • Moldova
  • Mongolia
  • Montenegro
  • Morocco
  • Mozambique
  • Myanmar
  • Nepal
  • Netherlands
  • New Zealand
  • Niger
  • Nigeria
  • Norway
  • Pakistan
  • Panama
  • Paraguay
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Puerto Rico
  • Romania
  • Russia
  • Rwanda
  • Saudi Arabia
  • Senegal
  • Serbia
  • Seychelles
  • Singapore
  • Slovakia
  • Slovenia
  • South Africa
  • Spain
  • Sri Lanka
  • Sweden
  • Switzerland
  • Taiwan
  • Tanzania
  • Thailand
  • Togo
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • Turkmenistan
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Uruguay
  • USA
  • Uzbekistan
  • Venezuela
  • Vietnam
  • Zambia
  • About Us
  • Our CEO
  • Our Board
  • Our Global Executive Team
  • Quality, Process & Risk Management
  • Corporate Tax
  • Customs
  • Financial Services
  • Global Mobility
  • Indirect Tax
  • International Corporate Tax
  • Mergers & Acquisitions (M&A)
  • Private Clients & Family Office
  • Sustainability & ESG in Taxation
  • Tax Controversy
  • Tax Technology
  • Transfer Pricing & Valuation
  • Real Estate
  • Latest News
  • Pillar Two - Global Minimum Tax
  • Brochures
  • Newsletters
  • Newsletter Subscription
  • Surveys & Studies
  • The Digital Tax Law Center (DTLC)
  • The European Tax Law Center (ETLC)
  • Climate Protection, Green Tax & Energy
  • Sustainability & ESG in Taxation
  • Tax Loss Carryback
  • Real Estate Guide
  • Tax and Investment Facts CEE
  • Assignments to Europe & Asia Pacific
  • Assignments to the Americas
  • Culture and Leadership
  • Diversity
  • WTS Global Academy
  • Career
  • Your Development
  • Jobs
  • Pillar Two Team
  • Press
  • Events & Webinars
  • CI Guide
  • Contact
WTS worldwide
  • Albania
  • Angola
  • Argentina
  • Armenia
  • Australia
  • Austria
  • Bangladesh
  • Belarus
  • Belgium
  • Benin
  • Bolivia
  • Bosnia & Herzegovina
  • Brazil
  • Bulgaria
  • Burkina Faso
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Chile
  • China
  • Colombia
  • Costa Rica
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Estonia
  • Finland
  • France
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Greece
  • Guatemala
  • Guinea
  • Honduras
  • Hong Kong
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iran
  • Iraq
  • Ireland
  • Israel
  • Italy
  • Ivory Coast
  • Japan
  • Kazakhstan
  • Kenya
  • Korea
  • Kyrgyzstan
  • Laos
  • Latvia
  • Lithuania
  • Luxembourg
  • Macao
  • Macedonia
  • Madagascar
  • Malaysia
  • Mali
  • Malta
  • Mauritius
  • Mexico
  • Moldova
  • Mongolia
  • Montenegro
  • Morocco
  • Mozambique
  • Myanmar
  • Nepal
  • Netherlands
  • New Zealand
  • Niger
  • Nigeria
  • Norway
  • Pakistan
  • Panama
  • Paraguay
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Puerto Rico
  • Romania
  • Russia
  • Rwanda
  • Saudi Arabia
  • Senegal
  • Serbia
  • Singapore
  • Slovakia
  • Slovenia
  • South Africa
  • Spain
  • Sri Lanka
  • Sweden
  • Switzerland
  • Taiwan
  • Tanzania
  • Thailand
  • Togo
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • Turkmenistan
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Uruguay
  • USA
  • Uzbekistan
  • Venezuela
  • Vietnam
  • Zambia
  • About Us
    About Us

    Here you will find more information on our organization’s structure, experts and global reach.

    Read more
    About Us Our CEO Our Board Our Global Executive Team Quality, Process & Risk Management
  • Services
    Services
    Read more
    Corporate Tax Customs Financial Services Global Mobility Indirect Tax
    International Corporate Tax Mergers & Acquisitions (M&A) Private Clients & Family Office Sustainability & ESG in Taxation Tax Controversy
    Tax Technology Transfer Pricing & Valuation Real Estate
  • Experts
    Experts

    With a representation in over 100 countries, our team offers local expertise on a global scale. Learn more about our experts.

    Read more
  • News
    News

    Find here the latest news 

    Read more
    Latest News
  • Knowledge
    Knowledge
    Read more
    Pillar Two - Global Minimum Tax Brochures Newsletters Newsletter Subscription Surveys & Studies
    The Digital Tax Law Center (DTLC) The European Tax Law Center (ETLC) Climate Protection, Green Tax & Energy Sustainability & ESG in Taxation Tax Loss Carryback
    Real Estate Guide Tax and Investment Facts CEE Assignments to Europe & Asia Pacific Assignments to the Americas
  • Culture & Career
    Culture & Career

    The WTS Global Academy - Bringing value to the whole

    Read more
    Culture and Leadership Diversity WTS Global Academy Career Your Development
    Jobs
  • Locations
    Locations
    Read more
  • Search
28.04.2022

Netherlands: Government proposal to curb dividend stripping

The Dutch government intends to introduce measures to (better) curb dividend stripping with respect to portfolio shares. Recently, the Dutch government started an online consultation round, to provide an opportunity for interested parties to give their opinion on the possible measures to reach this goal. Nine reactions were published, among them letters from leading industry and consultancy associations as well as leading pension investors.

In the consultation, the government presented six alternatives, on which it wanted to hear the opinion of the public:

  • Alternative A : Legal ownership and economic ownership of shares mandatory for reduction, crediting or refund of dividend tax.
  • Alternative B : Introducing a holding period for the full legal and economic ownership of shares before and after record date15 to determine who is the ‘owner’ of the dividend.
  • Alternative C : Introducing a net return / base approach for settlement or refund of dividend tax: The effect would be that dividend tax can only be credited insofar as there is corporate income tax to be paid on the dividend, after deduction of expenses. Pension funds would be exempt from this requirement.
  • Alternative D: Documentation obligations: To support a system where it can be proven that only one dividend note / voucher is issued for a particular dividend payment, dividend notes must be registered with the Dutch tax authorities and shareholders are required to show a dividend note when claiming a credit, refund or reduction of tax.
  • Alternative E : Codification record date: Make it a legal requirement – instead of a policy – that only the person who has the right to receive the dividend on record date is the person with a right to credit, refund or reduction of tax.
  • Alternative F : Include affiliated entities: Only full economic ownership, possibly together with affiliated persons / entities, will be legally sufficient to show that a person has economic ownership.
     

The measures should meet the following (pre) conditions:

  • good feasibility (for the tax authorities and the market);
  • attention to impact on regular stock exchange trading and consequences for citizens and companies; and
  • international and European legal sustainability.
     

Comments of the interested parties

The interested parties differ in their comments, which is of course in part due to their different backgrounds, but some similarities in opinion can be discerned from the comment letters. Clearly, alternatives A and B are not favoured, as they are seen as unworkable and / or ineffective. The same is more or less the case with respect to alternative C, which is seen as very complex, too broad, disruptive in the market, unworkable.

The commenting parties mainly found that the alternatives D, E and F will not be effective as stand-alone measures. Only in combination with other measures they might be effective, but it will depend on the combination.

Overall, not one of the six alternatives seems fit to reach the goal set by the government. Maybe there are more workable alternatives. The Dutch Association of Tax Advisors made some practical suggestions in that respect:

  • await the outcome of a securities lending case that is currently pending at the Supreme Court, and which may yield a firmer grip on how dividend stripping can be challenged under current law;
  • to leave the current status of the law as to what constitutes dividend stripping as it is, but only strengthen the formal position of the tax authorities to give them a better position to challenge possible dividend stripping cases;
  • possibly introduce a reporting obligation, similar to DAC 6, based on ‘hallmarks’ that are deemed to be typical for dividend stripping transactions. This should be implemented on an EU wide basis as dividend stripping is an international problem.
     

It is understandable that tax authorities want to eradicate ‘real’ dividend stripping activities, where transactions are implemented with the sole goal of achieving a tax advantage. However, there are many instances where a transaction - that could be seen as a potential dividend stripping - is in fact based on a substantive business transaction and the tax effect is just a consequence and not the goal of the business transaction.

The current financial system and financial transactions are complex and diverse. But this has the effect that many measures to challenge dividend stripping can be disruptive and interfering with real business transactions and may damage the financial system. In our view, this means that it would be preferable that measures against dividend stripping are taken on an EU or on a global (OECD) level. The net result of anti-dividend stripping rules may be negative if they cause more damage than the loss of tax-revenue through dividend stripping is worth. Hopefully, the Dutch government will strive for an international solution that is both effective and causes minimal harm to bona-fide transactions involving portfolio shares. We will, of course, be closely monitoring the developments with respect to this issue.

Read the WTS Global Financial Services Newsletter here.

Article published in WTS Global Financial Services Newsletter #24/2022
News from ten European countries with a focus on the international Financial Services industry
View publication
Newsletter Global Financial Services

News with a focus on the international Financial Services industry.

Subscribe now
Articles you might be interested in

Our colleague Denis Pouw provides insight on the most interesting developments of 2020 regarding the Dutch "dividend tax" on portfolio dividends received from foreign investment funds.

Netherlands: Developments regarding WHT on portfolio dividends
Read more

On 9 April 2021, the Dutch Supreme Court ruled in a landmark case that will decide all pending cases where foreign investment funds claim the refund of Dutch dividend WHT suffered in years starting from 2008.

Dutch Supreme Court of 9 April 2021 regarding Dutch dividend WHT refund claims
Read more

On 3 September 2021, the Appeals Court at ‘s-Hertogenbosch ruled in a case of a German real estate investment fund in contractual legal form (Immobilien-Sondervermoegen) – ‘the Fund’, with respect to its foreign tax payer status for its income from Dutch real estate in the years 1997/1998 until 2009/2010.

Court decisions on German real estate investment fund with Dutch real estate income & Dividend tax refund for UK pension fund
Read more

Get in contact

If you have any questions about WTS Global or our global services, please get in touch.
We will respond to you as soon as possible.

Contact
About Us
  • About Us
  • Our CEO
  • Our Board
  • Our Global Executive Team
  • Quality, Process & Risk Management
Services
  • Corporate Tax
  • Customs
  • Financial Services
  • Global Mobility
  • Indirect Tax
  • International Corporate Tax
  • Mergers & Acquisitions (M&A)
  • Private Clients & Family Office
  • Sustainability & ESG in Taxation
  • Tax Controversy
  • Tax Technology
  • Transfer Pricing & Valuation
News
Knowledge
  • Pillar Two - Global Minimum Tax
  • Brochures
  • Newsletters
  • Surveys & Studies
  • The Digital Tax Law Center (DTLC)
  • VAT Update for the Digital Economy
  • The European Tax Law Center (ETLC)
  • Tax Loss Carryback
  • Real Estate Guide
Culture & Career
  • Culture and Leadership
  • Diversity
  • WTS Global Academy
  • Career
  • Your Development
  • Jobs
Exclusive Cooperation With
© 2023 WTS Company Information Data Protection Disclaimer