News item | 15-07-2022 | 4:00 pm
The government wants to take additional measures to tackle dividend stripping. It is undesirable that no or less dividend tax is paid as a result of this form of tax avoidance. However, with current legislation and regulations, this is not always possible. Additional measures will be examined and further elaborated in the coming period.
With dividend stripping, the economic and legal rights to dividends are split in order to achieve a tax advantage. For example, the legal ownership of the shares is (temporarily) lent to another party that has a more favorable tax situation, such as a Dutch shareholder who can offset the dividend tax. This limits or prevents the levy of dividend tax.
State Secretary Marnix van Rij: “The government finds it undesirable that parties pay no or less tax by means of dividend stripping. The complexity and international character of dividend stripping show that the current measures are insufficient. New, additional measures are therefore necessary.”
The government has recently investigated how best to improve the approach to dividend stripping. An internet consultation was also held to map out the impact of possible alternative measures. In the coming period, the government will examine and further elaborate the following additional measures to combat dividend stripping more effectively:
- Limiting settlement or refund of dividend tax (net return/base approach);
- Stricter documentation obligations;
- Legally establishing the reference date on which it is determined who is entitled to receive the dividend;
- Introduction of a legal provision that determines whether a person (together with related parties) holds the economic interest in the shares.
It is further investigated whether it is possible to convert these alternatives into effective and feasible measures. The way in which the information and evidence position of the Tax Authorities can be improved is also examined. In addition, further research is being conducted into whether an additional measure should be introduced that focuses on pension funds.
International developments in legislation and regulations are also followed, because dividend stripping often takes place across national borders. As dividend stripping continues to develop, it is also important to be able to make timely adjustments where necessary. That is why the cabinet will monitor the new measures to be introduced.
In the coming period, further research will be conducted and it will be examined whether and how these measures can be elaborated in a bill.