New Dutch substance requirements published

As of 1 January 2018, various changes have been implemented in the Dutch Dividend Withholding Tax (“DWT”) Act and Dutch Corporate Income Tax (“CIT”) Act (i.e. the substantial interest taxation rules concerning interests of foreign corporate shareholders in Dutch companies). In connection thereto various decrees have been updated to elaborate on the criterion which requires that a structure is set up for valid business reasons which reflect economic reality. Specifically the decrees contain guidance on the substance required with respect to a foreign intermediary holding company (“Holdco”) holding an interest of 5% or more in a Dutch resident corporate income taxpayer. The substance requirements are alike the substance requirements which already were relevant with respect to so-called financial services companies and with respect to companies aiming to obtain an advance pricing agreement or advance tax ruling from the Dutch tax authorities.

  • At least half of the statutory and decision making directors of Holdco are resident of the state of residence of Holdco;
  • The directors mentioned above have the required professional knowledge to perform their duties satisfactory. Their duties should at least include decision making on the transactions of Holdco and should further include taking care of a proper execution of the transactions entered into, on the basis of the own responsibility of Holdco and within the framework of normal group influence;
  • Holdco has qualified personnel at its disposal to properly execute and register the transactions entered into;
  • Board decisions are taken in the state of residence of Holdco;
  • The most important bank accounts are kept in the state of residence of Holdco;
  • The bookkeeping takes place in the state of residence of Holdco.


Further, as of 1 April 2018 two additional substance requirements will have to be met:

  • Holdco incurs a wage cost which relates to the intermediary holding activities in the amount of € 100,000 multiplied by the country of living index.
  • Holdco has real estate at its disposal in its state of residence which real estate includes an office equipped with the usual facilities for performing the activities mentioned above, and which activities are also actually performed in that office.


The cost of living index may reduce the wage cost requirement of € 100,000. Examples of cost of living indexes to be taken into account with respect to other countries are 90% for Cyprus, 60% for Lithuania, 100% for Luxembourg, 80% for Malta, 60% for Poland and 100% for Switzerland.

A further relevant aspect concerns an update of a decree which provides guidance with respect to the requirement that the Dutch tax authorities have to be informed in case the DWT exemption is applied. A form has been released which has to be filled in and submitted with the Dutch tax authorities within one month of such a dividend distribution by a Dutch resident corporate income taxpayer.

Please note that the statutory Dutch DWT rate amounts to 15%. The statutory Dutch CIT rate currently amounts to 25% (20% for profits up to € 200,000). The CIT rate will be lowered to 21% in 2021 (16% for profits up to € 200,000).

Key contacts

Cees-Frans Greeven

Managing Partner | Lawyer
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+31 (0)20 333 8390 /+352 (0)2644 0919 21

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