Withholding tax

Tax on income imposed at source, i.e. a third party is charged with the task of deducting the tax from certain kinds of payments and remitting that amount to the government. Withholding taxes are found in practically all tax systems and are widely used in respect of dividends, interest, royalties and similar tax payments. The rates of withholding tax are frequently reduced by tax treaties.

At present the Netherlands has a withholding tax on dividends. It is expected that as from 2020, Dutch tax law also provides for a withholding tax on interest and royalties paid to certain group companies residing in low taxed jurisdictions.