Netherlands published Decree No. 2026-15551 in Official Gazette No. 29108 on 19 August 2026, updating tax treaty interpretations with a critical reclassification of banking service fees as business profits, assigning primary taxing rights to the residence state rather than the source state.
The Netherlands State Secretary for Finance has issued the Decree nr. 2026-15551, updating and clarifying several key tax treaty interpretations on 6 August 2026.
The Decree No. 2026-15551, which replaces Decree No. 2023-11648 of 16 June 2023, was published in the Official Gazette No. 29108 on 19 August 2026.
The Decree outlines official positions on interpreting tax treaties, the Decree on the Avoidance of Double Taxation 2001, and domestic tax regulations to prevent both double taxation and double non-taxation. The document addresses specific thematic areas, such as the classification of hybrid entities, the tax status of permanent establishments—including new guidance on remote work—and the treatment of dividends, interest, and royalties.
Furthermore, it incorporates recent stances from specialist knowledge groups regarding maritime profits, software licenses, and specific treaty conditions with countries like Germany, Switzerland, and the US.
The key updates are summarised below:
Shipping and capital gains (nuanced clarification)
Under older tax treaties based on the OECD Model Tax Convention (OMV) from 1992–2014, shipping profits and capital gains from ship disposals are indeed taxable only in the state where the enterprise’s place of effective management (“werkelijke leiding”) sits.
The decree notes that under the updated OMV 2017 framework, this right is assigned to the residence state of the entrepreneur rather than the place of effective management. For dual-enterprise structures with split management, the ultimate division of taxing rights remains identical, but the legal mechanism has shifted.
Swiss pension funds (confirmed)
A Swiss Anlagestiftung (an investment foundation set up by pension funds for joint asset management) qualifies as a pension fund under Article 3(1)(j) and Protocol Article II of the Netherlands-Switzerland Income Tax Treaty (2010). Consequently, they are eligible for a full refund of Dutch withholding tax on dividends under Article 10(3)(b).
Share buybacks (confirmed)
Under the protocols of the tax treaties with Germany (2012) and Switzerland (2010), share buybacks are treated as dividend income rather than capital gains. This permits the Netherlands to levy its statutory 15% dividend tax on the amount that exceeds the average paid-up capital, and the Netherlands is not obligated to reduce this tax regardless of how Germany or Switzerland calculates the income locally.
Mezzanine loans (confirmed)
For mezzanine loans under the German treaty (2012) that qualify as debt for Dutch tax purposes but trigger withholding tax in Germany under Protocol Article IX, double taxation relief cannot be handled through a simple classification shift. Instead, if a different instrument qualification fails, taxpayers must seek relief via a Mutual Agreement Procedure (MAP) under Article 25.
Banking fees (critical correction)
Fees for services such as credit approvals, contract negotiations, closing/handling commissions, waiver fees, penalty interest (boete-rente), or cancellation fees do not qualify as “interest” under Article 11 OMV.
Because they are not interest, these fees are classified as business profits (“winst uit onderneming”) under Article 7 OMV. Consequently, the residence state (the state where the bank is established) retains the primary taxing rights—not the source state (unless the fees are attributable to a local permanent establishment).
Equipment rentals (confirmed)
Due to specific reservations made by Poland, the Czech Republic, Italy, and Portugal, payments for renting industrial equipment (such as forklifts, trucks, containers, and pallets) are classified as royalties under these bilateral treaties. This allows these countries to levy withholding tax, for which the Netherlands then grants a foreign tax credit.
Software licenses (confirmed)
Under treaties with China (2013) and South Korea (1978), software license payments are treated as business profits (exempt from withholding tax in the source country) if they represent a mere right to use the software (e.g., for distribution intermediaries). However, if the license grants rights to exploit the underlying copyright—such as rights to reproduce and sell, modify, or access the source code and algorithms—the fees are taxed as royalties.
Offshore permanent establishments in Denmark (confirmed)
Under the Netherlands-Denmark treaty (1996), Dutch enterprises conducting offshore activities in Denmark for more than 30 days within a 12-month period are deemed to have an offshore permanent establishment. The Netherlands exempts this profit under Article 24(9) on the condition that tax was “paid” in Denmark. The decree clarifies that this requirement is met even if no tax is physically paid in Denmark due to mandatory local consolidation (e.g., offsetting the PE’s profits against Danish group losses).
Transport rental locations (confirmed)
If a foreign vehicle-rental operator is allocated specific parking or storage sites in the Netherlands where vehicles are kept for users to pick up and return, these sites can constitute a Dutch permanent establishment under Article 5 OMV. This leads to Dutch corporate income tax liability for the foreign operator, provided the activities are carried out over a sufficient duration.
