Publication of Decree in response to Sofina judgment | Deloitte Nederland


Publication of Decree in response to Sofina judgment

The Sofina judgment of the Court of Justice of the EU has resulted in the publication of a Policy Decree recently, setting conditions under which it is possible to obtain a refund of dividend withholding tax and betting and gaming tax.

11 December 2020

Sofina judgment

On 22 November 2018, the Court of Justice of the EU (“CJEU”) issued a judgment in the French Sofina case. According to the CJEU’s judgment, in certain situations French dividend withholding tax legislation is contrary to EU law. Circumstances may arise in which Dutch tax legislation may lead to an outcome similar to that of the French legislation. This may involve situations in which a Dutch company distributes a dividend to a parent company that is not a Dutch resident company and from which dividend withholding tax is withheld. A Dutch-based parent company could have set off such dividend withholding tax against its corporate income tax due. Had this been insufficient, the parent company could have qualified for a refund. That refund possibility was not open to parent companies established outside the Netherlands. For those situations it is now approved that, subject to certain conditions, a refund of the dividend withholding tax (and betting and gaming tax) withheld can be granted. For dividend withholding tax, however, the refund only applies to income from portfolio investments.


The entity established abroad must apply for a refund. The decision on the application will be open to objection. The application is approved if a number of conditions are met. The main conditions are as follows:

  1. The entity is established in an EU/EEA Member State or a State with which the Netherlands has made arrangements on the exchange of information on levying dividend withholding tax and betting and gaming tax;
  2. The portfolio investments can be regarded as investments falling within the scope of the free movement of capital;
  3. The requesting entity must be the beneficial owner of the income from portfolio investments;
  4. The request must be submitted within three years of the end of the financial year in which the income or price was made available; 
  5. The entity must provide information based on which it can be assumed that, had the entity been established in the Netherlands, it would have had to pay less corporate income tax than the dividend withholding tax and betting and gaming tax levied. 
  6. The entity will issue a statement showing that it is not entitled to a reduction or set-off of the dividend withholding tax or betting and gaming tax withheld.
  7. If - in the year of refund or the five subsequent financial years - it becomes apparent that the entity is nevertheless entitled to a reduction or set-off, the entity must inform the inspector immediately. The same applies to the situation in which it turns out later that the entity would still be liable for corporate income tax if it was established in the Netherlands. In these situations, the body must repay the tax refunded. The repayment can be made by means of an additional tax assessment.

The Decree came into force on 5 December 2020.

Source: Government Gazette 2020, no. 63398

Did you find this useful?