Netherlands 97830 1920
07 oktober 2020

Crowe Tax Thursday: Dutch withholding tax on royalty & interest payments as of 2021 (ENG)

As of January 1, 2021, a withholding tax may be levied on outbound royalty and interest payments made by Dutch entities or branches.

Background

The Netherlands traditionally does not withhold any withholding tax on outbound interest and royalty payments. To further counter tax avoidance, a withholding tax on royalty and interest payments will be effective as of 2021.

The withholding tax applies to interest or royalty payments to affiliated entities, in case:

•the beneficiary is a tax resident in a low tax jurisdiction (statutory rate lower than 9% or included on EU black list); or
•The beneficiary is part of an abusive structure with the aim to avoid the withholding tax.

The withholding tax rate is expected to be 21.7% and should be reported and paid by the paying company within one month after the calendar year in which the payment is (deemed to be) made.

To do

All multinational companies should review whether their current finance or license structure will become subject to withholding tax in The Netherlands and whether the structure needs to be revised.

Questions

If you have any questions, please contact Hugo Everaerd.


  • Hugo Everaerd
  • h.everaerd@crowefoederer.nl
  • +31 (0)6 47 14 75 91
  • Tax partner