NETHERLANDS Law and Practice Contributed by: Michael Molenaars, Jeroen Smits, Reinout de Boer and Rogier van der Struijk, Stibbe
subject to final determination at the end of the year) of the value of the debts owed by it in 2026. This deemed income is taxable at a rate of 36%, to the extent that the net value of the underlying shares exceeds the exempt amount of EUR59,357 (2026). However, in June 2024, the Dutch Supreme Court ruled that the above-mentioned amended regime still violates the prohibition of non-discrimination and property rights if the deemed return exceeds the actual return. In this ruling, the Dutch Supreme Court also provided further guidance for calculating actual returns. In September 2023, the Dutch government published a legislative proposal (“ Wet werkelijk rendement box 3 ”) outlining a new tax regime for income received by individuals who do not qualify as substantial share - holders. The legislative proposal was presented to the House of Representatives on 19 May 2025. Unlike the previous and existing systems, the newly proposed capital gains taxation (“Box 3”) will assess an indi - vidual’s actual returns, allowing for the deduction of related expenses. These returns may encompass both realised and unrealised income from various assets and may be taxed against a rate of 36%. The legislative proposal was adopted by the House of Representatives on 12 February 2026, but the Dutch Minister for Finance has already announced that the legislative proposal will be amended. It is currently envisaged that the revised taxation system will enter into force on 1 January 2028, but the exact outlines of the new proposal still need to be determined. 4. Taxation of Inbound Investments 4.1 Application of Withholding Taxes The Netherlands has a withholding tax on profit dis - tributions that, in principle, taxes dividends at a rate of 15%. Based on the EU Parent-Subsidiary Direc - tive (PSD), a full exemption should be applicable for shareholders (entities) with a shareholding of at least 5%, subject to certain requirements (see below). If all requirements are met, under Dutch domestic law, a full exemption should also be available if the shareholder is a resident of a state with which the Netherlands has concluded a double taxation treaty, even in cases
where the double taxation treaty would still allow the Netherlands to levy DWT. An exemption is only avail - able if the structure or transaction, in line with EU case law, is not abusive and is entered into for valid com - mercial business reasons. Anti-Dividend-Stripping Cases The Dutch DWT exemption is denied in so-called div - idend-stripping cases (ie, in cases where it appears that the person receiving the dividend is not consid - ered the beneficial owner of the dividend). Dividend stripping may, for example, occur in cases where a shareholder transfers its shares to a third party which is entitled to a more beneficial withholding tax treat - ment, thereby holding its interest in the shares. As the current Dutch measures to avoid dividend strip - ping have not always proved to be effective in prac - tice, new legislation was introduced as of 1 January 2024 containing several measures to counter dividend stripping more adequately (eg, a shift in the burden of proof from the tax inspector to the individual seek - ing tax benefits, and the codification of the dividend record date for publicly traded shares in Dutch tax law). Also, further research was done regarding possi - ble additional measures combating dividend stripping with the aim of developing measures that can subse - quently be submitted for consultation. Recent case law of the Dutch Supreme Court has made it clear that the anti-dividend-stripping rules do not leave room for an “extensive” interpretation. Apart from national measures, it is the opinion of the Dutch government that dividend-stripping could be addressed most effectively in a European and inter - national context. In this regard, the Dutch government has expressed support for the European Commis - sion’s proposal for a Council Directive on Faster and Safer Relief of Excess Withholding Taxes (the “FAST - ER Directive”). The FASTER Directive was adopted by the European Council on 10 December 2024 and aims to simplify withholding tax procedures for dividend and interest payments on publicly traded instruments and to prevent tax fraud and abuse. EU member states have until 31 December 2028 to transpose the FASTER Directive into domestic law, with the rules to apply from 1 January 2030.
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