Are private LLCs subject to a withholding tax on royalties, interest and dividends?

In the Netherlands profit distributions, such as dividends and liquidation payments exceeding the contributed equity, paid by Dutch LLCs are taxed with 15% withholding tax.

The rate can decrease in cases when non-residents receiving dividends are eligible for tax reduction by virtue of a relevant treaty on taxes concluded by the country or the EU Directive on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States.

Under particular conditions it is possible to circumvent the withholding tax on dividends in the Netherlands by using a local cooperative.

Interest, rentals and royalties paid by resident Dutch LLCs to non-resident entities are not subject to withholding taxes.

Read more: 

• Starting a business in the Netherlands
• Setting up a company in the Netherlands
• Merchant account Netherlands