Netherlands: Denial of dividend withholding tax exemption under anti-abuse provision upheld
Advocate General of the Dutch Supreme Court issued opinions upholding denial of the dividend withholding tax exemption
CJEU Advocate General opinions
The Advocate General of the Dutch Supreme Court on 9 June 2023 issued opinions in two cases (with a combined appendix), upholding denial of the dividend withholding tax exemption based on application of the anti-abuse provision.
Summary
The cases concerned dividends distributed by companies established in the Netherlands to Belgian holding companies, of which the (direct or indirect) shareholders in Belgium were resident members of the same family. In one of the cases, the holding company did not carry on a business of substance. In the other case, the holding company did carry on a business of substance in connection with the holding of shares in other companies, but the shares in the company that distributed the dividend could not be functionally attributed to that business.
In both cases, the Court of Appeals Amsterdam ruled that there was abuse, so that the dividend withholding tax exemption could not be applied. The taxpayers then appealed to the Supreme Court. The Advocate General determined that the taxpayers’ appeals must be dismissed because the Court of Appeals Amsterdam used the correct legal standard and its conclusions were reasonable.
Read a June 2023 report prepared by the KPMG member firm in the Netherlands
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