Investing in the Netherlands is fairly common, but if you are Belgian and you invest in Dutch companies, up until recently you owed a 15 percent dividend tax to the Dutch tax authorities. An arrest made by the European Court will make a change in this.
Arrest European Court
A Dutch investor, living in Belgium has started a procedure before the European court, because he felt he was being discriminated against his countrymen living in the Netherlands. The Court confirmed in this procedure that there was indeed a case of discrimination and obstruction of free traffic of capital when investing in the Netherlands. This ruling has profound implications on Belgians who own Dutch shares. According to analysts, Dutch companies can no longer impose taxes at the source which means these Belgians are now entitled to reclaim the dividend taxes they paid in the Netherlands.
Many different banks however, disagree with these conclusions. The legislation in the Netherlands has not been formally adjusted yet, which means one cannot force Dutch companies to refrain from imposing these dividend taxes yet.
According to legal specialists, investors also have to consider the total value of their Dutch shares package. All Dutch shares cannot exceed a value of 24.437 euro per taxable person. The higher the value of the asset in the Netherlands, the lower the amount you can reclaim. This makes it impossible for Dutch companies to apply the exemption themselves; after all, they have no insight in the investor’s total investment portfolio, who may have invested in many different Dutch companies.
Practically, this would mean that Belgian investors have to figure out for themselves if they are entitled to reclaim the Dutch dividend tax when investing in the Netherlands. For the time being, the banks will not assist them in this matter, because they - as we here from different large banks – do not offer such services.
The time that Belgian investors who own Dutch shares have to pay taxes on their profits twice seems to be over with this arrest, even though there are still a couple of procedural and practical matters to clarify, before one can effectively start reclaiming.
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