• Service: Tax, International Tax
  • Type: Regulatory update
  • Date: 12/31/2013

Netherlands - Withholding tax on dividends distributed to foreign shareholders 

December 31: The Dutch Supreme Court filed with the Court of Justice of the European Union (CJEU) requests for preliminary rulings in three cases concerning the imposition of Dutch withholding tax on dividends distributed to Belgian shareholders and withholding tax on dividends distributed to a French bank.


Under Dutch tax law, a 15% dividend withholding tax is payable on dividends actually distributed by Dutch resident companies to foreign shareholders. In contrast, a Dutch investor’s shareholding is taxed in box 3 at 1.2% (the deemed fixed return of 4% is taxed at 30%).

Also, Dutch investors are effectively not subject to dividend withholding tax because they can credit the withheld dividend withholding tax or request a tax refund.

The issues involving the French bank case are similar. A French bank is subject to Dutch dividend withholding tax on the dividends it receives. A comparable Dutch bank would be subject to corporate income tax on the dividends it receives. Even though the Dutch tax to which the French bank is subject is lower than that of a comparable Dutch bank, the Dutch bank can deduct its costs.

KPMG observation

The ability of EU Member States to levy withholding tax on dividends paid to foreign shareholders is an issue throughout Europe. By requesting these preliminary rulings, the Dutch Supreme Court is apparently seeking greater clarity on the comparability factor as applied by EU law and how this is relevant to Dutch dividend withholding tax.

Read a December 2013 report prepared by the KPMG member firm in the Netherlands: The Supreme Court requests preliminary rulings on the levying of dividend withholding tax

©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International.

KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.

The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Direct comments, including requests for subscriptions, to
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.


Share this

Share this


Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)

Already a Subscriber? Login

Not a member? Subscribe now