It was reported on 31 December 2013 that the Dutch Supreme Court filed with the Court of Justice of the European Union requests for preliminary rulings in three cases concerning the imposition of Dutch withholding tax on dividends distributed to Belgian shareholders and withholding tax on dividends distributed to a French bank.
Under Dutch tax law, a 15% dividend withholding tax is payable on dividends actually distributed by Dutch resident companies to foreign shareholders. In contrast, a Dutch investor’s shareholding is taxed in box 3 at 1.2% (the deemed fixed return of 4% is taxed at 30%).
Also, Dutch investors are effectively not subject to dividend withholding tax because they can credit the withheld dividend withholding tax or request a tax refund.
The issues involving the French bank case are similar. A French bank is subject to Dutch dividend withholding tax on the dividends it receives. A comparable Dutch bank would be subject to corporate income tax on the dividends it receives. Even though the Dutch tax to which the French bank is subject is lower than that of a comparable Dutch bank, the Dutch bank can deduct its costs.
