Real estate rich company clause in the Double Tax Treaty between Poland and the Netherlands

Update - Further steps have been taken with regard to the entry into force of the Protocol

REal Knowledge –about the Polish real estate market 3/ 2021

On 29 October 2020 the Protocol to the Double Tax Treaty between Poland and the Netherlands was signed. It introduces, among others, the so-called real estate clause. However, for the Protocol to enter into force, first its ratification procedure must be completed in Poland and the Netherlands, followed by the mutual notification of the completion of ratification. The Protocol will enter into force on the last day of the third month following the month in which the last of the notifications is received by both countries, and will apply as from 1 January of the year following its effective date.

According to the available information, both countries have taken further steps in this regard.


The draft act on the ratification of the Protocol was submitted to the Parliament on 28 July 2021. The following day, the draft was referred for first reading to the Public Finance Committee and the Foreign Affairs Committee.

The Netherlands

The Protocol was presented to the Dutch Parliament for "tacit approval" on 21 May 2021. On 28 May 2021, the Raad van State published an opinion and report according to which the Advisory Division of the Council of State had no comments on the treaty and recommended submitting the treaty to both Houses of the States General. Subsequently, the Finance Committee submitted its questions and comments to the State Secretary of Finance which were answered in the form of a letter published on 23 June 2021.
As none of the documents provided by the Dutch government oppose the tacit consent procedure, the consent should be granted.

Key implications of the real estate rich company clause

The real estate rich company clause provided for in the Protocol introduces taxation of gains derived by a Dutch tax resident from the sale (or other alienation) of shares in a company (or comparable interests) if, at any time during the 365 days preceding the alienation, these shares derived more than 75% of their value directly or indirectly from immovable property (indirect shareholding must therefore be taken into account in this context).


Current status

Based on the current status it is still not clear whether the procedure will be completed in time to enter into force in January 2022. The status should be monitored in particular taking into account that there were situations in the past where the final procedure for the entry into force of a double tax treaty remained uncompleted for several years (e.g. amendments to the US-PL Double Tax Treaty).

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