The Dutch government is planning to introduce a new withholding tax on dividend flows to low-tax jurisdictions in 2024.
The new tax will come on top of the withholding tax to be imposed on interest and royalties from 2021. The new tax will enable the Netherlands to tax dividend payments to countries that levy little or no tax and will also help curb the use of the Netherlands as a conduit country. The measure will apply to financial flows to countries with a corporate tax rate of under 9% and to countries on the EU blacklist, even if the Netherlands has a tax treaty with them.
State Secretary for Finance, Hans Vijlbrief, explained: “This additional withholding tax represents another major step in our fight against tax avoidance. Financial flows channeled from or through the Netherlands to another country where they are not or not sufficiently taxed, will soon no longer go untaxed. It’s now vital to make even better international agreements to prevent other countries being used for tax avoidance purposes.”