Netherlands: Third amendment, bill on dividend withholding tax in cross-border reorganizations

Netherlands: Dividend withholding tax

A private member’s bill on the “Emergency Act on the Conditional Final Settlement of Dividend Withholding Tax” (submitted in July 2020) has been amended for a third time.


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The private member’s bill—presented in July 2020 in the lower house of Parliament—proposes to introduce a final settlement requirement to resolve dividend withholding tax obligations if there is a cross-border relocation of the registered office, a cross-border merger, a cross-border division or a cross-border share merger—in other words, when there is a cross-border reorganization by companies (head offices) resident in the Netherlands that are members of certain defined corporate groups. Read TaxNewsFlash

A memorandum on amendment to the bill was submitted in September 2020, and at that time, it was announced more changes would follow. Completely new text and an explanatory memorandum on 9 October 2020 were submitted to the Lower House of Parliament. Read TaxNewsFlash


The documents published regarding the third amendment on 12 March 2021 include:

  • The memorandum in response to the report
  • A supplementary memorandum of amendment with regard to the private member’s bill
  • An IBFD (Stichting Internationaal Belasting Documentatie Bureau) survey regarding countries that have exit taxes on undistributed profit reserves in the event of an imminent claims loss

The memorandum in response to the report deals extensively with questions raised by members of Parliament. It also responds to comments on the bill made by industry and professional associations and by academics. In general, no fundamental changes are proposed, but several minor technical changes or improvements were proposed—for instance, one providing that the imposition of a conditional dividend withholding tax assessment could not result in any type of corporate income tax deduction. 

KPMG observation

These documents were published shortly before the upcoming parliamentary elections, and thus, the bill’s fate is uncertain and will depend, in particular, on the outcome of the upcoming elections and the subsequent formation of a new government.

Read a March 2021 report prepared by the KPMG member firm in the Netherlands

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