Netherlands: Royalty withholding exemption denied due to lack of beneficial ownership (Supreme Court decision)

EU Interest and Royalties Directive overrides income tax treaty with Spain

The Supreme Court on January 12, 2026, held that the withholding tax exemption for royalties under the EU Interest and Royalties Directive (IRD) did not apply due to the absence of beneficial ownership.

The court also held that the Netherlands-Spain income tax treaty did not apply to reduce the 24.75% domestic withholding tax rate because the IRD overrides the treaty.

For more information, contact a KPMG tax professional in the Netherlands:

Paul Te Boekhorst | teboekhorst.paul@kpmg.com

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Netherlands: Royalty withholding exemption denied due to lack of beneficial ownership (Supreme Court decision)

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