Conditions for a refund
Portfolio investments are investments where you own less than 5% of the shares in a company situated in the Netherlands. It does not matter if the holder of the shares is a company or a person. Whether or not a refund procedure is applicable and whether you are entitled to a refund depends on facts and circumstances of each case. In general, the following conditions apply:
- To begin with, you must reside in the EU or a jurisdiction with which the Netherlands have concluded a tax treaty;
- you must not be subject or liable to Dutch (non-resident) income tax;
- the Dutch Withholding Tax cannot be fully offset against the income tax in your country of residence or is offset based on national regulations;
- the refund is granted at a request, which must be submitted within a period of five calendar years after the Dividend Tax has been withheld.
For example: you are a tax resident in Germany and hold an investment in a Dutch company that consists of 100 shares and makes up less than 5% of the shares in the company. The market value of the shares at 1 January 2023 is € 250,000. During 2023, the company paid out dividends of € 50,000, subtracting 15% Dividend Withholding Tax (€ 7,500). You are not subject to Dutch income tax on the income derived from the portfolio investments in any other way and the Dutch Withholding Tax cannot be fully offset against your income tax in Germany. If you would apply for a refund request based on this example, you could receive a refund of €3,700.
Do you think the conditions in this article applicable to your situation or do you have questions based on this article? Get in touch with us! We will look into your situation and make sure you get a Withholding Tax Refund!