The Netherlands levies dividend withholding tax. The Dutch dividend withholding tax rate is 15%. The rate applies to both domestic and cross-border dividend distributions.

Double tax treaties, exemptions, and possible relief methods

Dutch dividend withholding tax refund requests can be based on double tax treaties or, for certain foreign tax-exempt entities, based on article 10 of the Dutch Dividend Withholding Tax Act. Article 10 of the Dutch Dividend Withholding Tax Act provides for a full refund of Dutch dividend withholding tax on portfolio dividends to tax-exempt foreign investors that are objectively comparable with Dutch tax-exempt investors that are eligible for a full refund of Dutch dividend withholding tax (for example, pension funds).

A Dutch dividend withholding tax refund can be applied for after online registration via the website of the Dutch Tax Administration. Large authorized intermediaries (like Taxology) can file Dutch dividend withholding tax refund requests in bulk and electronically via an XML schema.

All refund requests must be accompanied by dividend tax vouchers from the withholding/paying agent, which are normally issued by (sub)custodians.  

The Dutch Dividend Withholding Tax Act provides for exemption (at source) from Dutch dividend withholding tax in certain specific situations. However, these exemptions are all typically aimed at substantial or active investment, as opposed to passive or “portfolio” investment. Protocol focuses on dividend withholding tax recovery concerning portfolio investment, not on substantial or active investment.

Statute of Limitations

The statute of limitations in The Netherlands establishes that requests must generally be filed within three years from the end of the year in which the dividend withholding tax was paid. When refund requests are based on double tax treaties that do not specify a statute of limitations, such requests can be filed up to five years after the end of the year in which the dividend withholding tax was paid.