The Netherlands holding company - past and present

The Netherlands holding company has been an important instrument for international tax structuring for many years. It exists by virtue of the participation exemption, a generic instrument in Netherlands domestic tax law for the avoidance of double taxation. Under the participation exemption, dividends and capital gains are excluded from taxable profits for corporate income tax purposes. The Netherlands participation exemption continues to distinguish itself from most other systems in that it provides a full and true exemption for qualifying income and gains without a minimum holding period. After providing a historical overview, this article examines the Netherlands holding company and the participation exemption.