🇳🇱 الامتثال السنوي — Netherlands

Setting up a Dutch holding BV without genuine substance

Fix: Dutch holding companies need real substance to access treaty benefits and the participation exemption. This means local directors (or at least directors who make decisions in the Netherlands), a real office, and board meetings held in the Netherlands. Without substance, tax authorities in other jurisdictions can challenge the structure.

Ignoring the conditional withholding tax on interest and royalties

Fix: Since 2021, the Netherlands imposes withholding tax on interest and royalty payments to entities in low-tax jurisdictions or non-cooperative jurisdictions. If your structure routes payments through a Dutch BV to a low-tax entity, this tax can negate the benefit. Review your payment flows with a Dutch tax adviser before implementation.

Underestimating banking due diligence timelines

Fix: Dutch banks are notoriously thorough. A holding company with non-resident directors and no local operations can wait 4–8 weeks for an account. Start the banking process immediately after incorporation and consider a fintech bridge account (Bunq, Revolut Business) for initial operations.

Assuming the participation exemption applies to all shareholdings

Fix: The participation exemption requires a minimum 5% shareholding in a subsidiary that is not primarily holding passive investments and is subject to a reasonable level of tax. Portfolio investments, passive holding vehicles in zero-tax jurisdictions, and holdings below 5% do not qualify. Verify each subsidiary meets the conditions.