of the Corporation Tax act of 1969, no settlement will take place. If the shareholder is an
entity located in the Netherlands which is not subject to corporation tax, the dividend tax
withheld can under certain conditions be refunded by the Tax Authorities on the request of
Income and Corporation Tax on Dividends and capital gains
A shareholder who is not or is not deemed to be resident in the Netherlands is not
subject to Dutch income or corporation tax for the dividends paid out by the Company
(with the exception of the dividend tax mentioned above), unless:
a this holder has an (participating interest in an) enterprise which is managed in whole
or in part using a Dutch-resident permanent establishment or representative, of which
capital the shares effectively form part of;
b this holder has a (fictitious) substantial interest in the Company and the shares form
no part of the capital of an enterprise.
If the shareholder is resident outside the Netherlands, and a double taxation convention is
in force between the Netherlands and his/her country of residence, the shareholder,
especially in the situation mentioned under b, may qualify for protection by the
If shares are held by a natural person resident in or deemed to be resident in the
Netherlands, income from shares is in principle subject to Dutch income tax. Dividends in
the form of shares charged against the tax-exempt share premium reserve received by a
shareholder who is not an owner of a company, are not liable to income tax. In certain
situations, private individuals may avail themselves, up to specified amounts, of the
dividend exemption. Capital gains are in general only liable to Dutch income tax if:
the shares are attributable to the company capital of the natural person;
the shareholder has a substantial interest in the company. In this case, taxation will be
at a rate of 25%, instead of at the progressive rate.
If shares are held by entities or other bodies resident in or deemed to be resident in the
Netherlands, and which are subject to Dutch corporation tax, income from shares
(including capital gains) is subject to Dutch corporation tax, unless the shareholder, with
regard to these dividends and other income, is entitled to participation exemption as
stated in article 13 of the Corporation Tax Act 1969.
Entities are not liable to Dutch wealth tax.
A natural person who holds shares and is not or is not deemed to be resident in the
Netherlands, is subject to Dutch wealth tax for his shares if he has an (participating
interest in an) enterprise which is managed in whole or in part using a Dutch-resident
permanent establishment or representative, of which capital the shares effectively form
A natural person who is holding shares and is resident in the Netherlands, is subject to
Dutch wealth tax. Exemptions may apply, as well as a tax-free allowance.
The rate of the wealth tax is 7%0 (1998).
Gift Tax, Inheritance Tax and Transition Tax
Dutch gift tax is levied on any received gift of shares by a person resident in the
Netherlands at the time of the gift. Dutch inheritance tax is levied on any received
inheritance of shares by a person resident in or deemed to be resident in the Netherlands
at the time of the inheritance. If the shares are part of a(n) (participating interest in an)