EU tax treaty networks: which layer cuts your withholding tax?
Three layers decide how much tax leaks when money moves from a subsidiary to your holding: the EU directives, the tax treaty, and domestic law. Pick your payment and countries below and see which layer applies, and what it takes to keep it.
tax treaties in force worldwide
treaties in the Dutch network
treaties in the Luxembourg network
withholding on qualifying intra-EU dividends
Directive, treaty or domestic law?
The strongest layer that applies wins. The finder shows which one it is for your flow, and the conditions that come with it.
1. What is paid?
2. Where is the paying company?
3. Which holding receives it?
4. The holding's stake in the payer
Typical outcomes, not a rate guarantee. Every route depends on beneficial ownership, holding periods, substance and anti-abuse rules. We confirm the exact rate for your countries.
More treaties, more corridors
Approximate number of tax treaties in force. A wide network matters most for flows to and from countries outside the EU, where the directives do not reach.
Indicative counts for comparison. Treaties are signed and updated every year.
Three layers, strongest first
EU directives
Parent-Subsidiary and Interest-Royalties Directives remove withholding on qualifying flows between EU companies. The strongest layer.
Tax treaties
Where no directive applies, usually for non-EU flows, the treaty cuts the domestic rate, often to 0–5% on qualifying dividends.
Domestic law
The default rate and any one-sided exemptions of the paying country, before anything else applies.
A rate on paper is not a rate you keep
A wide network is necessary for good structuring, never sufficient. Access is guarded by:
- The principal purpose test, added to most treaties by the Multilateral Instrument
- Limitation-on-benefits clauses, mainly in US treaties
- Beneficial ownership of the income by the recipient
- The anti-abuse clauses inside the EU directives
- Real substance and economic function in the company claiming relief
Is the Netherlands or Luxembourg better for treaties?+
The Netherlands has a slightly larger network, about 100 treaties against 88, and a treaty with Australia, which Luxembourg lacks. For most EU and US flows both work; the decision usually turns on stakes, owners and exit.
When does the Parent-Subsidiary Directive apply?+
To dividends between companies in different EU countries when the parent holds the required stake, usually 10%, sometimes for a minimum period, and the structure is not artificial.
Why was my treaty rate refused?+
Most often because the recipient was not the beneficial owner, failed the principal purpose test, or lacked substance. The paperwork was fine; the facts behind it were not.
Do treaties help with tax in my own country?+
Treaties also prevent double taxation at home, usually through a credit or exemption. We check the owner's side with your local adviser.
Can you map the route for my group?+
Yes. We map every flow from subsidiary to owner, with the layer and rate at each step, and the conditions to keep it.