On February 3, 2015 new Dutch regulations for tax treaties concluded by the Netherlands were published in the Government Gazette (Regulations of January 13, 2015, No. DGB 2015/70M and No. DGB 2015/71M). These regulations replace the Regulations of June 27, 2012 and April 28, 2010.
The regulations lay down the procedures for obtaining a reduction or exemption of Dutch dividend withholding tax at source, as well as for obtaining a refund of withheld Dutch dividend withholding tax. The most important changes to the regulations are set out below.
Validity of existing and new certificates limited to four years
Under the new regulations, approvals for a reduction or exemption of Dutch dividend withholding tax at source that are issued by the Dutch Tax and Customs Administration pursuant to Dutch tax treaties will be valid for a maximum four-year period.
This new four-year limitation applies to new and existing approvals. For existing approvals, the four-year period will commence on February 4, 2015. This means that taxpayers must apply for a new approval every four years if they wish to continue to rely on a reduction or exemption of Dutch dividend withholding tax upon distribution of a dividend.
To avoid uncertainty, taxpayers are advised to reconsider the relevant tax treaty requirements and apply for a new approval whenever relevant facts and circumstances change, regardless of this four-year period.
All requests to be submitted to one tax office
Going forward, all requests for a reduction or exemption of Dutch dividend withholding tax at source under tax treaties concluded by the Netherlands must be submitted to the Arnhem office of the Dutch Tax and Customs Administration, rather than the local tax office where the taxpayer is registered. The actual review of the requests will continue to be performed by the competent local tax inspector.
The new regulations are effective as of February 4, 2015 and will apply to dividend distributions made on or after March 1, 2015.
Commentary by Meijburg & Co
The new regulations require taxpayers to monitor the validity of their approvals to apply a reduced Dutch dividend withholding tax rate, as these will expire every four years, regardless of whether the relevant facts and circumstances change.
Existing approvals will expire at the latest in early 2019, assuming that the relevant facts and circumstances do not change.
If you would like more information, our tax advisors will naturally be happy to be of assistance.