The Dutch government released 12 memo files of over 50 pages in total, outlining the decision-making process to abolish the Dutch dividend tax. However, this does not ease the political pressure on the Dutch Prime Minister Rutte, as already last October, the Netherlands proposed to abandon the withholding tax on dividend of domestic source to lighten tax burden on tax payers.
As the price for attract foreign investment and boom employment, abolition of the dividend tax would cost the government 1.4 billion euro. Opposition parties pointed out that the policy was the joint efforts of big multinationals such as Unilever and Shell. According to the memos, Unilever significantly contributed to high-level lobbying, which played a “decisive” role to scrap the tax.
Under Dutch national law, dividends distributed are subject to tax at the rate of 15%. This is mainly imposed on foreign shareholders where participation exemption is open to Dutch shareholders. The dividend tax is generally withheld from the profit distributed to shareholders. Shareholders can deduct the withholding from the balance payable on their income tax or corporation tax returns.
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