Netherlands Tax Treaties with other countries

Netherlands has signed Double Taxation Agreements (DTA) with 98 countries.
Dutch companies have to pay withholding tax on interest and royalties if these payments are made to related companies in low-tax jurisdictions (below 9%) or are on the EU list for non-cooperative jurisdiction.
Companies are related in case of a direct or indirect control (e.g., in case one company has more than 50% of the voting rights in another company).

The withholding tax rate may be reduced by a tax treaty, if applicable.

Netherlands Tax Treaties with Taiwan
Netherlands Tax Treaties with China

Email: ams4ww@evershinecpa.com
The Engaging Manager from Headquarter
Ms. Anna Wang, Speak Dutch English, and Chinese.
skype: burlinna

We set up below judgment criteria on Treaty application:

Scenario:
If you are not a Netherlands legal resident, and if your resident country has DTA with the Netherlands, and if you are without PE (Permanent Establishment), please go to Section A.
If you are not a Netherlands legal resident, and if your resident country has DTA with the Netherlands, and if you are with PE (Permanent Establishment) please go to Section B.
If you are not a Netherlands legal resident, and if your resident country has no DTA with the Netherlands, please go to Section C.

Section A:
Scenario:

If you are not a Netherlands legal resident, and if your resident country has DTA with Netherlands, and if you are without PE (Permanent Establishment), it will be deemed as “non-Netherlands Domestic Sourced Income”.
That means Netherlands will levy zero-tax.
However, your still need to send zero-tax application to Netherlands Tax Bureau for being approved.

Below, we will let you understand through Q&A.

DTA-Q-10:
In Netherlands, which foreign legal resident company can apply for zero tax rate without PE under DTA?

DTA-A-10:
The Netherlands has signed DTAs with over 98 countries:

DTA-Q-20:
Why does the Country’s foreign capital without a permanent establishment (PE) in the Netherlands, under the DTA enjoy zero tax rate?

DTA-A-20:
It follows Article 5 and Articles 7 in the DTA Treaty. Articles define if foreign entity having PE in Netherlands.
Article 7 regulate if no PE, non-Netherlands domestic sourced income will not be levied tax in Netherlands

DTA-A-Q30:
Under what circumstances are deemed to have no PE, and will the establishment of a foreign-funded subsidiary in the Netherlands be regarded as a foreign-funded subsidiary in the Netherlands?

DTA-A-30:
According to DTA Article 5 item 7, A Wholly Foreign Owned subsidiary in the Netherlands will not be treated as PE because it is a separate legal entity.
That means if a Netherlands Subsidiary pays a service fee to a non-Netherlands Parent Company through a service contract signed between the subsidiary and non -Netherlands Parent company as an investor, non-Netherlands Parent Company can apply zero tax.
As for if the paid amount is reasonable, it will get involved TP (Transfer Pricing) judgment by Netherlands Tax Bureau.
Please see the Netherlands Transfer Pricing webpage

DTA-Q-40:
If a foreign company establishes a branch or office in the Netherlands, can the zero-tax rate without PE be applied?

DTA-A-40:
According to DTA Article 5 item 2, If a foreign company sets up a branch or Office in the Netherlands, then will be considered as Netherlands domestic Income.
But According to DTA Article 5 item 4, if an Office is only doing a preparatory or auxiliary activity, will apply a zero-tax rate.

DTA-Q-50:
What is the procedure for the Netherlands to apply for zero tax rate under DTA without PE?

DTA-A-50:

Dutch companies withhold tax from the dividend they pay to shareholders: dividend tax.
The dividend tax rate is 15%.
In case of full or partial exemption, a company will already withhold less or no dividend tax from the dividend to be paid.
If you have not requested an exemption, you may (afterwards) request a refund of any dividend tax paid in excess.
You can file a digital request for a refund of the Dutch divided tax withheld.
You must register first in order to request a dividend tax refund.

https://mijn.belastingdienst.nl/ppa/

Send in the form ‘Registreren voor teruggaaf dividendbelasting’ (Registering for a dividend tax refund).

https://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/themaoverstijgend/applications_and_forms/application_for_a_partial_exemption_from_or_refund_of_dutch_dividend_tax_universal

By using the above form, residents of treaty countries other than the USA, Aruba, the Netherlands Antilles, Belgium, the United Kingdom of Great Britain and Northern Ireland, the Irish Republic, Israel, Japan, Malaysia, Malta, and Singapore, may apply for a (partial) exemption from, or refund of, Dutch dividend tax.

Section B:

Scenario:

If you are not a Netherlands legal resident, and if your resident country has DTA with Netherlands, and if you are with PE (Permanent Establishment), your income will be considered as Netherlands domestic sourced income.
As for levying Tax Rate, please be aware:
if Netherlands Tax rate > DTA Rate, adopt DTA Rate; if Netherlands Tax rate < DTA Rate, adopt Netherlands Rate.

Below, we will let you understand through Q&A

DTA-Q-60:
What are the factors that are deemed to be the country’s domestic source income?

DTA-A-60:

1. Business income derived from a permanent establishment in the Netherlands.
2. Income derived in relation to a “substantial interest” in a Dutch company (generally an interest of 5% or more) if the shareholding does not belong to the assets of an enterprise and the substantial interest is held with the main purpose of avoiding Dutch personal income tax and/ or the Dutch dividend tax of another person and the Dutch subsidiary is not put into place for sound reasons.
3. Income and gains from Dutch real estate property
4. Income from the exploration and exploitation of natural resources on the continental shelf of the Netherlands.

DTA-Q-70:
Do Article 5 and Article 7 in the DTA take precedence over the Netherlands’ determination factors on Netherlands’s domestic sourced income?

DTA-A-70:
When DTA is applied, in the event of a different PE definition between Dutch domestic tax laws and Article 5 in the DTA, the definition under the DTA shall prevail over the domestic regulations.

When DTA is applied, if a foreign company is defined as without PE (Permanent Establishment) in the Netherlands, they will be considered non-Netherlands domestic sourced income, in the event business profit is relevant to this issue, the clause in Article 7 in the DTA zero-rate tax can be applied accordingly.

In this scenario, please see section A.

DTA-Q-80:
When non-tax residents of the Netherlands have Netherlands domestic sourced income, what is the withholding tax rate according to Netherlands tax regulations excluding DTA?

DTA-A-80:

The withholding tax rates under domestic law are:

Business Profits – 0% (Note 1)

Dividend – 15% (Note 2)

Interest (General loan) – 0% (Note 3)

Royalties fee – 0% (Note 4)

Technical services – 0% (Note 5)

Professional services – 0% (Note 1)

Note:

1. The Netherlands does not impose withholding tax on payments to nonresidents for services.
2. 0% applies under the domestic law provisions implementing the EU Parent-Subsidiary Directive, dividends paid by a Dutch company to a parent company resident in another EU Member State.
3. There is no withholding tax on interest (though it should be noted that interest on participating loans is treated as a dividend for withholding tax purposes).
4. There is no withholding tax on royalties.
5. The Netherlands does not impose withholding tax on payments to nonresidents for services.

DTA-Q-90:
If DTA Tax Rate is higher than the Netherlands tax rate, which tax rate apply?

DTA-A-90
As for levying Tax Rate, please be aware:
if Netherlands Tax rate > DTA Rate, adopt DTA Rate; if Netherlands Tax rate < DTA Rate, adopt Netherlands Rate.

DTA-Q-A0:
When non-tax residents of the Netherlands have Netherlands domestic sourced income, what is Netherlands’s application procedure based on the DTA preferential tax rate?

DTA-A-A0:

Dutch companies withhold tax from the dividend they pay to shareholders: dividend tax.

The dividend tax rate is 15%.

In case of full or partial exemption, a company will already withhold less or no dividend tax from the dividend to be paid.

If you have not requested an exemption, you may (afterwards) request a refund of any dividend tax paid in excess.

You can file a digital request for a refund of the Dutch divided tax withheld.

You must register first in order to request a dividend tax refund.

https://mijn.belastingdienst.nl/ppa/

Send in the form ‘Registreren voor teruggaaf dividendbelasting’ (Registering for a dividend tax refund).

https://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/themaoverstijgend/applications_and_forms/application_for_a_partial_exemption_from_or_refund_of_dutch_dividend_tax_universal

By using the above form, residents of treaty countries other than the USA, Aruba, the Netherlands Antilles, Belgium, the United Kingdom of Great Britain and Northern Ireland, the Irish Republic, Israel, Japan, Malaysia, Malta, and Singapore, may apply for a (partial) exemption from, or refund of, Dutch dividend tax.

Section Ｃ:

DTA-Q-B0:
As an investor, if your country has not signed DTA with the Netherlands, what kinds of tax rates when you have Dutch relevant income?

DTA-A-B0:

The withholding tax rates under domestic law are:

Business Profits – 0% (Note 1)

Dividend – 15% (Note 2)

Interest (General loan) – 0% (Note 3)

Royalties fee – 0% (Note 4)

Technical services – 0% (Note 5)

Professional services – 0% (Note 1)

Note:

1. The Netherlands does not impose withholding tax on payments to nonresidents for services.
2. 0% applies under the domestic law provisions implementing the EU Parent-Subsidiary Directive, dividends paid by a Dutch company to a parent company resident in another EU Member State.
3. There is no withholding tax on interest (though it should be noted that interest on participating loans is treated as a dividend for withholding tax purposes).
4. There is no withholding tax on royalties.
5. The Netherlands does not impose withholding tax on payments to nonresidents for services.

Please be aware of the below Warning:
The above contents are digested by Evershine R&D  and Education Center in December 2022.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

Amsterdam Evershine BPO Service Limited Corp.
Email: ams4ww@evershinecpa.com
The Engaging Manager from Headquarter
Ms. Anna Wang, Speak Dutch, English and Chinese.
skype: burlinna

or
For how to exchange data files between your Finance Accounting System and Evershine Cloud Accounting Information System, please send an email to HQ4ams@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable for your case.
LinkedIn address:Dale Chen

Additional Information

Evershine CPAs Firm Headquarters
6th Floor 378 Chang Chun Rd., Taipei City, Taiwan ROC
Partner Kerry Chen, USA Graduate School and a well-English speaker
Tel No.: +886-2-27170515 ext. 105
Mobile: +886-939357000
Email: kerrychen@evershinecpa.com
Skype: oklahomekerry

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(version: 2024/07)

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