The Cabinet of Ministers announced that it plans to introduce additional measures to combat tax evasion when paying dividends. According to Secretary of State Van Rij, changes in the country's legislation are necessary. The new rules are expected to come into effect no earlier than January 1, 2024.
The modern legislation of the Netherlands leaves many loopholes so that the recipients of dividends reduce taxes from them or even do not pay them completely.
To change this order, the government plans to:
- Introduce an approach to determining the tax base for dividends based on profits.
- Increase reporting requirements for companies.
- Legislatively establish the reporting date, at the time of which it is determined who owns the right to receive dividends. This is an extremely important point, since the practice is now widespread in which the rights to company shares (and, accordingly, dividends) are temporarily transferred to those company members who can pay less tax. Often such rights are transferred to a resident of the Netherlands, who can receive tax refunds on dividends. This significantly reduces budget revenues.
The European Commission is working on changes to legislation that will allow taxes to be levied on non-EU residents at the source of their income in the European Union. In particular, an information exchange system is being developed that will allow not only to receive taxes in full, but also to quickly reimburse taxpayers for overpaid amounts. The European Commission is expected to submit its proposals in late 2022 or early 2023. It will take about a year to put these proposals into action, so we should expect real changes in early 2024.
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Publication Date: 22.08.2022
