Last modified: 09 December 2013
Income from a substantial interest in a company, including capital gains or losses, is subject to income tax and is taxed at a rate of 25%.
A taxpayer is regarded as having a substantial interest in a company if he or she, either solely or with his or her partner, holds 5% of the issued capital, directly or indirectly. If the company has issued different classes of shares, a substantial interest also exists if the taxpayer, either alone or with his or her partner, holds more than 5% of the issued capital of a particular class of shares. If the taxpayer holds a substantial interest in a company, profit-sharing bonds issued by that company and held directly or indirectly by him or her, either solely or with his or her partner, are regarded as forming part of the substantial interest.
Dividends and capital gains derived from the alienation of shares are taxed at a proportional rate of 25% in the income tax. In the event of capital loss, 25% of that loss may be offset against the tax which would otherwise be due. For this purpose an arrangement similar to that for offsetting losses is applicable. If the taxpayer emigrates, the substantial interest is deemed to be alienated. However, the tax due will not be collected as long as the substantial interest is not disposed of. After the elapse of 10 years, the remainder of the tax levied because of the deemed alienation at the time of emigration is pardonned.
For non-residents the income from substantial interests is only subject to tax in case of a substantial interest in a company resident in the Netherlands. With respect to non-residents a company is also deemed to be a resident of the Netherlands if it was resident in the Netherlands for at least five years during the last ten years. With respect to non-residents the substantial interest is deemed to have been alienated in case of the transfer of the place of effective management of the company from the Netherlands to elsewhere.