Sunday 01 August 2021

Dutch to introduce new tax to cut evasion via dividend payments

Photo: Depositphotos.com

The finance ministry has decided to impose a withholding tax on multinationals which are sending more dividends than thought to tax havens, junior tax minster Hans Vijlbrief said on Friday.

The tax will be introduced in 2024 and follows new research by the Dutch central bank which indicates €37bn in interest, royalties and dividends flowed out of the Netherlands to tax havens in 2018. Earlier estimates put the figure at €22bn.

‘This extra tax at source is yet another step towards tackling tax evasion,’ Vijlbrief said. ‘Money flows which move via or from the Netherlands to another country where they are not taxed soon will be.’

The Netherlands was already planning to bring in a withholding tax on royalties and interest next year. If MPs vote in favour, a 21.7% tax on dividends will be introduced three years after that.

The taxes would affect money flows to the 24 countries on the EU blacklist, including Panama and the Seychelles, as well as countries in which taxes on corporate profits are below 9%.

Some 10,000 shell, or letter-box, companies are based in the Netherlands and are primarily used to shift corporate earnings and obscure ownership.

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