Changes (as proposed) would revise how profit distributions by cooperatives (in principle, that are not subject to dividend withholding tax) and private limited liability companies (BVs) or public limited companies (NVs) (in principle, that are subject to tax) are treated, given how they currently are treated differently for tax purposes.
A draft bill on the “withholding obligation for holding cooperatives and expansion of the withholding exemption” was opened for public consultation on 16 May 2017. The contents of the draft bill generally is in line with previous letters from the Deputy Minister. In the draft explanatory notes, the Deputy Minister indicated that the cooperative structure is increasingly being used in international structures and that the Cabinet wants to remove the difference in the treatment of BVs and NVs and holding cooperatives—partly in response to the state aid risk.
The government’s position is that no dividend withholding tax is to be levied in shareholding structures when there is a business structure. This is subject to the precondition that real cooperative businesses are not affected. According to the draft explanatory notes, these measures are in line with the strategy of the Netherlands to take a proactive approach on international tax evasion and, on the other hand, retain an attractive tax and business climate.
The draft bill contains both amendments to the Dividend Withholding Tax Act 1965 and the Corporate Income Tax Act 1969. The consultation closes on 13 June 2017. The amendments are intended to be effective 1 January 2018. It was announced that measures covering the business sector would be included, but that these would only appear in the final bill (expected to be presented on or around Budget Day).
Read a May 2017 report prepared by the KPMG member firm in the Netherlands
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