Netherlands: Proposal concerning final settlement of dividend withholding tax for cross-border reorganizations

December 2021 amendments reflect certain essential changes to the scope and the tax methodology

Cross-border reorganizations

A pending proposed bill (originally introduced in July 2020) was on 8 December 2021 amended by a fourth memorandum of amendment.

Focus of the bill was sharpened when a major petroleum corporation announced on 15 November 2021 that it would relocate its head office to the United Kingdom.

While the proposals generally are the same, the December 2021 amendments reflect certain essential changes to the scope and the tax methodology. In essence, the amended proposal would levy a dividend withholding tax when (deferred) profit reserves are transferred to a jurisdiction that typically does not “take over” the Dutch dividend withholding tax claim.

Accordingly, the measure would introduce a final dividend withholding tax settlement obligation for cross-border reorganizations—including the cross-border relocations of registered offices, cross-border mergers, cross-border split‑offs/divisions and cross-border share mergers. This measure concerns cross-border reorganizations by companies established in the Netherlands (head offices) with a distributable profit of more than €50 million at the time of the reorganization.

The effective date of the proposal originally was with retroactive effect 10 July 2020. However, it has now been proposed to introduce the measures with retroactive effect as of 8 December 2021 (the date when the fourth memorandum of amendment was presented to the Lower House of Parliament).

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


The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained 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. 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.