Internet consultation launched on measures to prevent dividendstripping | Deloitte Netherlands


Internet consultation launched on measures to prevent dividendstripping

On 15 December 2021, the Dutch government published an internet consultation on possibilities to strengthen the existing measures to prevent dividendstripping. Stakeholders can send comments to the government until 26 January 2022.

17 December 2021


The Dutch government has researched if dividendstripping can be prevented adequately with the current national anti-abuse measures and if not, what alternative measures are possible and necessary. With dividendstripping, the economic and legal ownership of a dividend is split between the shareholder and a third party. The shareholder keeps the economic ownership and is the beneficial owner of the dividends, but transfers the legal ownership (temporarily) to a third party. This third party is entitled to a more beneficial treatment for dividend withholding tax purposes than the shareholder, and with this a tax benefit is created.

Current anti-abuse measures

When the current anti-abuse measures for dividendstripping were introduced, the legislator aimed to introduce rules that are generic, enforceable, and do not create overkill. Only obvious cases of dividendstripping can be countered based on these measures. Therefore, the Dutch tax authorities are not capable of adequately fighting dividendstripping. Additionally, due to the high burden of proof resting on the Dutch tax authorities, as well as the growing complexity of dividendstripping structures, the proper prevention of this phenomenon requires additional anti-abuse rules according to the government.

Internet consultation

In the internet consultation the legislator has listed six different measures to prevent dividendstripping more effectively in the future. All potential measures are specifically aimed at portfolio shareholdings. The alternatives must be enforceable, have proportionate impact on the regular stock exchange trade, citizens and companies, and must be in line with international and European law. Given that the effectiveness of the options differs greatly, the legislator wants to involve the affected parties and public in the weighing of these different measures. It is also possible to suggest alternative options.

The six alternative measures

The government has formulated the following six potential measures to better prevent dividendstripping:

a. require both legal and economic ownership at the time of the dividend payment for a sett-off, refund or reduction of dividend withholding tax;

b. introduce a holding period requirement (i.e., the beneficial owner of the dividend has to be the legal and economic owner during a certain period before the record date and a certain period after that date, possibly with a rebuttal provision or a sum threshold);

c. introduce a net return/base approach for a set-off or refund of dividend withholding tax (i.e., the dividend withholding tax can only be offset as far as corporate income tax is owed for the dividend after the reduction for related costs, possibly with an efficiency threshold);

d. additional documentation requirements;

e. codification of the beneficial owner of the dividend on the record date; and

f. introduction of a provision for related entities to prevent the splitting of interests within the group.

For options d, e, and f it is indicated in the consultation document that each option does not seem sufficient in itself to prevent dividendstripping.

Next steps

The internet consultation will be open until 26 January 2022. The House of Representatives will most likely be informed about the outcomes in the spring of 2022.


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