1. Specific holding company regime(s)
    1. Key tax features
  2. Other attractive features of the corporate tax regime

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Netherlands
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Specific holding company regime(s)

The Dutch tax system includes rules from which holding companies resident in the Netherlands can benefit. These consist of:

  • a tax exemption for inbound dividends and capital gains on qualifying participations;
  • a withholding tax exemption for outbound dividends;
  • no (conditional) withholding tax on interest and royalty payments (unless such payments are due to majority shareholders located in certain low-taxing or non-cooperative jurisdictions);
  • the Netherlands has an extensive double tax treaty network, having concluded bilateral tax treaties with over 100 countries to avoid double taxation.

There is no specific tax regime for holding companies.

Key tax features

  • No corporate income tax on inbound dividends received on qualifying 5% shareholdings. Certain exceptions apply, for example if profit distributions are deductible in the subsidiary’s hands.
  • No corporate income tax on capital gains in respect of qualifying 5% shareholdings.
  • Holding companies can be exempt from withholding tax on outbound dividend payments made to a qualifying corporate shareholder with a 5% interest located in an EEA member state or tax treaty country. Profit distributions by sufficiently active cooperatives are fully out of scope of dividend withholding tax.
  • There are no general withholding taxes on outbound interest payments and royalty payments.
  • Provided that a structure has sufficient economic nexus with the Netherlands, it possible to obtain advance tax rulings from the Dutch tax authorities, confirming the authorities’ position on the tax treatment of the company and its shareholders.
  • The Dutch tax systems provides for detailed tax substance rules, which need to be carefully considered on a case-by-case basis.

Other attractive features of the corporate tax regime

The Netherlands has a stable corporate income tax regime that has long been attractive for holding companies. The regime provides for a relatively low step-up rate of 19% for taxable profits up to EUR 200,000 and a headline rate of 25.8% if and to the extent profits exceed this threshold. Dutch tax rules allow entities to apply a functional currency other than the EURO.