As per January 1st 2021, a Dutch withholding tax on interest and royalties is introduced. As a result, interest and royalties paid by a Dutch withholding agent established in the Netherlands, to an affiliated entity established in a low-tax jurisdiction or in a normal jurisdiction where there is an abusive situation, will be taxed in the Netherlands.
A state is considered a low-tax jurisdiction if it applies a statutory rate of less than 9% for profit tax or if it is included in an EU list of non-cooperative jurisdictions for tax purposes in that period.
An abuse situation exists when an entity is entitled to the benefits for the primary purpose of avoiding the imposition of tax and there is an artificial arrangement or a set of transactions that can be considered artificial.
The withholding tax rate corresponds to the highest percentage in corporate tax: 25%.
The taxpayer is the beneficiary and the tax is levied on the benefits in the form of interest and royalties. The tax is levied by deduction from the benefits. The Dutch withholding agent withholds the tax at the time when the benefits are received.