Withholding Tax Act 2021: A Split from Historical Trends!

The Netherlands is introducing a conditional withholding tax from 1 January 2021 to prevent the country from being used as a “conduit state” for intra-group interest and royalty flows to low-tax jurisdictions and in situations of abuse. The introduction of this tax marks a break from former trends, as one of the features that traditionally characterized the Netherlands tax system was the absence of withholding tax on interest and royalties.