Netherlands: Tax exemption on Dutch dividends extended to qualifying non-EU/EEA countries
Effective
1 January 2012
tax exemption on dividends paid on Dutch equities is available also to tax-exempt investors resident in countries that are not European Union (EU) or European Economic Area (EEA) member states, provided that sufficient tax information exchange is in place between the Netherlands and the respective non-EU/EEA country.
Also, a new official tax form DIV 16 must be used by all tax-exempt investors that want to file a full standard refund application with the Dutch Tax Authorities based on the Dutch Dividend Tax Act.
Background
The Dutch Dividend Tax Act extends the existing tax exemption on Dutch dividends available for tax-exempt investors resident in EU/EEA member states to any investors provided that the following requirements are met:
- They are the effective beneficial owners of the dividends.
- They are recognised as exempt entities by their tax authorities and are not subject to corporate income tax in their country of establishment.
- They are recognised as exempt entities according to Dutch fiscal legislation and as such would not be subject to corporate tax if they were resident in the Netherlands.
- They are established in a country that has signed a tax treaty or Tax Information Exchange Agreement (TIEA) with the Netherlands that meets the international standards or where the OECD WABB treaty (the Convention on Mutual Administrative Assistance in Tax Matters) is in effect.
- The dividends are derived from portfolio investments.
Qualifying countries
The following countries qualify for the extended tax exemption:
| Andorra | Brazil | Georgia | Isle of Man | Mexico | St Kitts/Nevis | Sweden |
| Anguilla | Bulgaria | Germany | Italy | Moldova | St Lucia | Switzerland |
| Argentina | Canada | Ghana | Japan | Monaco | St Maarten | Turkey |
| Aruba | Cayman Is | Gibraltar | Jersey | Montserrat | St V/Grenadines | Turks/Caicos |
| Australia | Cook Is | Greece | Latvia | N. Zealand | Samoa | UA Emirates |
| Austria | Curacao | Guernsey | Liechtenstein | Norway | San Marino | United Kingdom |
| Bahamas | Cyprus | Hong Kong | Lithuania | Panama | Saudi Arabia | Virgin Is (GB) |
| Bahrain | Czech Rep. | Hungary | Luxembourg | Poland | Singapore | - |
| Barbados | Denmark | Iceland | Macedonia | Portugal | Slovakia | - |
| Belgium | Estonia | India | Malaysia | Qatar | Slovenia | - |
| Belize | Finland | Indonesia | Malta | Romania | South Africa | - |
| Bermuda | France | Ireland | Marshall Is | Russia | Spain | - |
The above list is based on details, published by the Dutch Tax Authorities, of the countries that qualify for tax-exemption under the new extension, as follows:
- Global Forum on Transparency and Exchange of Information, providing an overview of all countries that have either a Double Taxation Treaty (DTT) or a TIEA in place with the Netherlands (that is, ’meets standard’ column is ‘Yes’):
http://www.eoi-tax.org/jurisdictions/NL#agreements - The OECD website, providing the list of countries where the multilateral treaty (WABB, including the 2010 Protocol) has become effective:
http://www.oecd.org/dataoecd/8/62/49521827.pdf
Note: Countries may be added to or removed from this list at any time.
New DIV16 tax form
The Dutch Tax Authorities have issued a new official tax form, called DIV16 (see attachment below), that all resident and non-resident tax-exempt investors must use when applying for a standard refund.
Impact on customers
In order to apply for a standard tax refund, all tax-exempt entities must provide Clearstream Banking1 with the following documentation:
- Form DIV 16 (Refund for Foreign Bodies with Exemption from Profits Tax);
- Certification from the entity’s local tax authority proving the civil and fiscal status of the legal entity;
- Credit advice;
- Letter of Request to Clearstream Banking for a Tax-Exempt Refund.
The first reclaim application must be accompanied by an extract of the articles of association of the entity, clarifying its objectives and certifying the non-profit status that gives the right to the entity to qualify as tax-exempt under Dutch law.
The statutory deadline for reclaiming withholding tax is five years after the end of the calendar year in which the income is paid. The deadline can vary depending on the DTT of the country of residence of the beneficial owner. Details are available in our Market Taxation Guide – Netherlands.
The deadline by which Clearstream Banking must receive the documentation for an application is, at the latest, two months before the relevant statutory deadline.
Further information
For further information, please contact the Clearstream Banking Tax Help Desk on:
| Luxembourg | Frankfurt | |
| Email: | tax@clearstream.com | tax@clearstream.com |
| Telephone: | +352-243-32835 | +49-(0) 69-2 11-1 3821 |
| Fax: | +352-243-632835 | +49-(0) 69-2 11-61 3821 |
or Clearstream Banking Customer Service or your Relationship Officer.
1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in the Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500 (CBF) and Clearstream Banking, société anonyme, registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Register of Commerce and Companies under number B-9248 (CBL).
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