Both the Netherlands and Luxembourg withhold 15% on dividends. A foreign parent company usually pays nothing: from a 5% stake in the Netherlands, from 10% or EUR 1.2 million held for 12 months in Luxembourg, provided the parent is genuine. Affiliated companies in Dutch-listed low-tax jurisdictions pay 25.8%. Individuals pay 15% and credit it at home. Luxembourg does not withhold on liquidation proceeds; the Netherlands does. The Dutch company files within one month, the Luxembourg one within eight days.
Who keeps the 15%, and how to get it to zero legally
When a Dutch B.V. or a Luxembourg company pays a dividend, the company is the tax collector. It withholds 15% of the gross amount, pays it to the tax authority and transfers the rest to the shareholder. The shareholder does not file anything at source; the company does, and the company is liable if it gets the rate wrong.
For many non-resident shareholders the 15% never applies. A foreign parent company with a real stake in the subsidiary usually receives the dividend without any withholding, under the domestic exemptions that implement the EU Parent-Subsidiary Directive and extend it to treaty countries. Individuals almost never get that result. For them the 15% is a prepayment, credited against tax in their country of residence, or reduced by a treaty.
Three questions decide the outcome: who the shareholder is (an individual or a company, and with what stake), where the shareholder lives (EU, treaty country, low-tax jurisdiction), and whether the structure has substance. The last question has become the decisive one. Dutch courts and the Luxembourg tax authorities now test the shareholder company, not just its address.
15% in both
Netherlands and Luxembourg, 2026.
Parent companies
NL 5%; LU 10% or EUR 1.2 million.
25.8% in NL
Affiliated companies in low-tax lists.
1 month / 8 days
NL and LU respectively.
Withholding at a glance: Netherlands and Luxembourg in 2026
The table shows the starting point under domestic law. Treaty rates come into play only where no domestic exemption applies, and they cap the tax rather than replace the exemption.
| Situation | Netherlands | Luxembourg |
|---|---|---|
| Domestic rate | 15% | 15% |
| EU or EEA parent company | 0% from 5% stake (Art. 4(2) Wet DB) | 0% from 10% or EUR 1.2 million, 12 months (Art. 147 LIR) |
| Treaty-country parent company | 0% from 5%, if the treaty has a dividend article | 0% if the parent is fully taxed at a comparable rate; otherwise treaty rate |
| Affiliated company in a listed low-tax jurisdiction | 25.8% conditional withholding tax (2026) | No equivalent; 15% or treaty rate |
| Individual shareholder | 15%, treaty cap usually 15% | 15%, treaty cap usually 15% |
| Liquidation proceeds above paid-up capital | 15% | No withholding tax |
| Share buyback | 15% on the amount above paid-up capital, with limited exceptions | No withholding tax for a full class redemption under Art. 101 LIR; otherwise a capital gain |
| Repayment of share premium or paid-up capital | No tax if properly recognised for tax | No tax, if no reserves are available |
The table follows our Benelux rates page: 15% dividend withholding tax in the Netherlands and Luxembourg, 30% in Belgium. The Luxembourg corporate tax rate matters for the comparable-tax test discussed below: 23.87% combined in Luxembourg City in 2026, and 22.80% from 2027 if budget bill no. 8800 is passed.
Law and practice: Netherlands: Dividend Tax Act 1965 (Wet op de dividendbelasting 1965), Articles 1, 3 and 4; Withholding Tax Act 2021 (Wet bronbelasting 2021) as extended to dividends from 1 January 2024. Luxembourg: Income Tax Law (LIR), Articles 97, 101, 146, 147 and 149. Both countries implement Directive 2011/96/EU (Parent-Subsidiary Directive).
Dutch B.V.: exemption, anti-abuse and the 25.8% rate
Dutch dividend tax is 15% on profit distributions by Dutch-resident companies: ordinary and interim dividends, bonus shares paid from reserves, liquidation proceeds above the paid-up capital and share buybacks above the average paid-up capital. Repayment of capital and share premium is free of tax if it has been formally decided and the capital is recognised for dividend tax.
The B.V. may withhold nothing if the shareholder is an entity resident in the EU, the EEA or a country with which the Netherlands has a tax treaty containing a dividend article, and four conditions are met. The shareholder holds at least 5% of the nominal paid-up capital. The shareholding would qualify for the Dutch participation exemption if the shareholder were Dutch. The shareholder is not treated as resident outside the treaty state under a treaty. And the structure is not abusive.
The anti-abuse test has two limbs. The subjective limb asks whether the main purpose, or one of the main purposes, is to avoid Dutch dividend tax in someone else's hands. The objective limb asks whether the arrangement is artificial, meaning not set up for valid commercial reasons that reflect economic reality. On 18 July 2025 the Dutch Supreme Court confirmed that a holding company with no staff, no office and family shareholders deciding on distributions failed the test, even though it was resident in Belgium. An active business elsewhere in the group did not save it: the shares must be functionally attributed to that business.
Since 1 January 2024 a second layer applies. The conditional withholding tax hits dividends paid to an affiliated company, broadly one with a controlling interest, resident in a jurisdiction on the Dutch list. The rate is the top corporate tax rate, 25.8% in 2026. The regular 15% is credited against it, so the combined burden is 25.8%, not 40.8%. A treaty can limit it, and some treaties do.
| Dutch list 2026 | Jurisdictions |
|---|---|
| Low-tax (no profit tax or a statutory rate below 9%) | Anguilla, Bahamas, Bahrain, Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Isle of Man, Jersey, Turkmenistan, Turks and Caicos Islands, Vanuatu |
| EU list of non-cooperative jurisdictions | American Samoa, Anguilla, Fiji, Guam, Palau, Panama, Russian Federation, Samoa, Trinidad and Tobago, US Virgin Islands, Vanuatu |
| Removed recently | UAE (from 2024, after its 9% corporate tax), Barbados (from 2026) |
Individuals do not benefit from the exemption. The domestic 15% applies, and most Dutch treaties cap dividends for individuals at 15%, so the treaty changes little. The relief comes in the country of residence, which credits the Dutch tax. An individual in a non-treaty country pays 15% and may find no credit at home.
A Cypriot holding company owns 100% of a Rotterdam B.V. and receives EUR 400,000. On paper the exemption applies: EU resident, stake above 5%, participation exemption available. In practice the B.V. must be able to show why the parent is in Cyprus. If the Cypriot company has its own director with decision-making power, an office, other investments it actively manages and the dividend is used there, the B.V. withholds nothing. If the Cypriot company is a mailbox owned by a German resident, the Belastingdienst can deny the exemption, and the B.V. owes EUR 60,000 plus interest. Since Cyprus is not on the Dutch low-tax list, the conditional 25.8% does not apply.
Law and practice: Article 4(2) and (3) Wet DB 1965; Dutch Supreme Court judgments of 18 July 2025 on the withholding exemption and earlier judgments on Curaçao holding companies; Article 2.1 Wet bronbelasting 2021 and the Regulation on low-tax and non-cooperative jurisdictions, updated annually at year end; PwC Netherlands summary of the 2026 list (pwc.nl).
Luxembourg company: Article 147, liquidation and the SPF
Luxembourg withholds 15% on dividends paid by fully taxable companies, including hidden profit distributions such as excessive interest on shareholder loans or an asset sold to the shareholder below market value. The rate is the same as in the Netherlands, but the exemption works differently and the treatment of exits is more generous.
Under Article 147 LIR no tax is withheld if the shareholder is a qualifying entity and holds, or commits to hold, at least 10% of the capital or shares acquired for at least EUR 1.2 million, for an uninterrupted period of at least 12 months. Qualifying entities are companies covered by the Parent-Subsidiary Directive, Luxembourg fully taxable companies, Swiss capital companies taxed without exemption, certain EEA companies and companies resident in a treaty country that are fully subject to a tax comparable to Luxembourg corporate income tax.
"Comparable" is applied in practice as a tax at a rate of at least half of the Luxembourg corporate income tax rate on a similar base: 8% with the 16% rate in force since 2025, and lower once the rate drops to 15% in 2027. A UK, US or Swiss company passes easily. A UAE company taxed at 9% on its mainland profit may pass; a UAE free zone company relying on the 0% rate does not, and then falls back on the treaty rate. A Jersey or BVI company fails, and there is no treaty to fall back on.
The 12-month period does not need to be completed on the payment date. A commitment is enough, but if the shareholding falls below the threshold before the 12 months are up, the 15% becomes due retroactively. An anti-abuse rule, taken from the directive, denies the exemption for arrangements that are not genuine.
| Payment | Luxembourg treatment |
|---|---|
| Ordinary and interim dividends | 15% unless Article 147 or a treaty applies |
| Liquidation proceeds | No withholding tax; the shareholder's home country taxes the gain |
| Redemption of a full class of shares | Partial liquidation, no withholding tax, since tax year 2025, if the class was created at incorporation or a capital increase, has its own economic rights, is redeemed at fair value under pre-set criteria and capital is reduced within six months |
| Other buybacks | Usually a capital gain; a price above market value is a hidden distribution |
| Distributions by an SPF | No withholding tax; the SPF pays 0.25% subscription tax instead and has no treaty access |
| Distributions by investment funds (SICAV, SIF, RAIF) | In principle no withholding tax |
This is why Luxembourg is often used as the top holding for an exit. A Luxembourg company that sells its subsidiaries can be liquidated, or redeem a class of shares, and pay the proceeds to a non-resident individual without Luxembourg tax. The shareholder's country of residence still taxes the gain, and some, such as Germany or Spain, may look through the company first (see CFC rules).
A Dubai mainland company holds 100% of a Luxembourg S.à r.l. and receives EUR 400,000. The Dubai company is subject to UAE corporate tax at 9% and holds the shares for several years. If it is fully taxed at that rate on comparable profit, Article 147 can give 0%. If it is a free zone company on the 0% qualifying income regime, the comparable-tax test fails and the Luxembourg–UAE treaty applies instead: 5% for a company holding at least 10%, so EUR 20,000. A UAE individual would pay 10% under the treaty.
Law and practice: Articles 97, 101, 146, 147 and 149 LIR; Law of 20 December 2024 (bill no. 8388) amending Article 101 LIR for share class redemptions from tax year 2025; Law of 11 May 2007 on the SPF; Grant Thornton Luxembourg, Tax tips 2025: withholding tax on dividends (grantthornton.lu); PwC Worldwide Tax Summaries, Luxembourg withholding taxes (taxsummaries.pwc.com).
Spain, Cyprus, the UAE and the rest: what the treaties give
Treaties matter when the domestic exemption does not apply: individuals, companies with small stakes, and companies that fail the comparable-tax or substance tests. The rates below are the maximum the source country may withhold. They apply only if the shareholder is the beneficial owner and passes the principal purpose test that most treaties now contain after the multilateral instrument.
| Shareholder resident in | From the Netherlands | From Luxembourg |
|---|---|---|
| Spain | 15%; 5% for a Spanish company with 50% (or 25% with another); 0% under the directive | 15%; 5% for a company with 25% for one year; 0% under Art. 147 |
| Cyprus | 15%; 0% for a company with 5% | 5%; 0% for a company with 10% |
| United Arab Emirates | 10%; 5% for a company with 10% | 10%; 5% for a company with 10%; 0% under Art. 147 |
| United Kingdom | 10% portfolio; 0% for a company with 10% of the votes | 15%; 0% for a beneficial owner company |
| United States | 15%; 5% from 10% of the votes; 0% from 80% with conditions | 15%; 5% from 10%; 0% with conditions |
| Switzerland | 15%; 0% for a company with 10% | 15%; 5% from 10%; 0% under Art. 147 |
| Bahrain | Treaty rates, but conditional 25.8% for affiliated companies; check the treaty limit | 10%; 0% for a company with 10% |
Two practical points. First, the UAE treaty with the Netherlands covers individuals only if they are UAE nationals living in the UAE; a foreign resident of Dubai usually pays the full 15%. Second, a treaty rate can be applied at source only if the company has the documents before payment: a residence certificate from the shareholder's tax authority and, in the Netherlands, the relevant form. Otherwise the company withholds 15% and the shareholder claims the difference back.
A Spanish-resident founder owns 100% of a Dutch B.V. and receives a dividend of EUR 100,000. The B.V. withholds EUR 15,000 and pays EUR 85,000. In Spain the gross EUR 100,000 is savings income taxed at progressive rates from 19% to 30%, about EUR 21,900 on that amount for someone without other savings income. Spain credits the EUR 15,000, so the founder pays about EUR 6,900 more in Spain. The total stays at the Spanish rate. A Luxembourg company gives the same result for a dividend; for a liquidation, Luxembourg withholds nothing and Spain taxes the gain.
Law and practice: Netherlands–Spain treaty of 1971; Netherlands–UAE treaty (in force since 2010); Luxembourg–UAE treaty of 2005 as amended by the protocol of 2014; Luxembourg–Cyprus treaty of 2017; Multilateral Instrument, Article 7 (principal purpose test); Spanish Income Tax Law (Ley 35/2006), Article 66 and Article 80 (foreign tax credit). Treaty rates as summarised in PwC Worldwide Tax Summaries for the Netherlands and Luxembourg, October 2026.
Resolutions, returns, deadlines and refunds
A dividend starts with corporate law. A Dutch B.V. can distribute only to the extent its equity exceeds the reserves required by law or the articles, and the board must approve the payment after a solvency test: will the company still be able to pay its debts for at least the next twelve months? Directors who approve a payment that fails the test are personally liable. A Luxembourg S.à r.l. distributes from the profit of the approved annual accounts, after the 5% transfer to the legal reserve until it reaches 10% of capital; interim dividends need interim accounts and authorisation in the articles.
- DecideShareholders' resolution with the amount and the payment date; board approval in the Netherlands.
- Check the shareholderResidence certificate, holding period, substance file, beneficial ownership statement.
- Withhold15%, 0% under the exemption, or the treaty rate if documents are in hand.
- File and payNL: dividend tax return and payment within one month after the dividend is made available. LU: return and payment within eight days, even when no tax is due.
- Keep the fileEvidence for the exemption or treaty rate, kept for at least the statutory retention period.
- RefundIf 15% was withheld but less was due, the shareholder files a refund claim with a residence certificate.
The payment date is the date the dividend is "made available": the date set in the resolution, or the day after the decision if none is set. Crediting a shareholder current account counts. If the company forgets to withhold and bears the tax itself, the dividend is treated as a net amount and grossed up: 15/85, or 17.65% of the amount actually paid.
Refunds take months, sometimes more than a year, and cost interest. It is cheaper to collect the documents before the first payment. For portfolio investors in the EU, refund claims based on EU law can go beyond the treaty rate when a domestic shareholder would have been taxed less; we cover this in our note on refunds under EU law.
Law and practice: Article 2:216 Dutch Civil Code (distribution and solvency test); Article 19 General State Taxes Act (filing within one month); Ondernemersplein, "Dividend, dividendbelasting, dividenduitkering" (ondernemersplein.overheid.nl); Article 149 LIR (eight days); Law of 10 August 1915 on commercial companies (legal reserve and interim dividends).
Withholding tax on your dividend
The result updates with each answer. It applies domestic law first, then the most common treaty rate, and shows the conditions you have to document.
Withholding tax on your dividend
Choose where the paying company sits, who receives the dividend and where the shareholder lives. You see the rate applied at source, the tax withheld, the net amount and whether a refund or relief is possible.
Exemptions and treaties decide the end.
A mailbox parent loses the exemption.
25.8% in NL for listed jurisdictions.
LU liquidation: no withholding tax.
Dividends to non-residents: frequent questions
What is the dividend withholding tax rate in the Netherlands and Luxembourg in 2026?
15% of the gross dividend in both countries. Exemptions apply to qualifying corporate shareholders, and tax treaties can reduce the rate for others. In the Netherlands a conditional withholding tax of 25.8% applies on top for affiliated companies in listed low-tax jurisdictions.
Can a Dutch B.V. pay dividends to my foreign holding company without withholding tax?
Yes, if the holding company is resident in the EU, the EEA or a treaty country with a dividend article, holds at least 5%, would qualify for the participation exemption if it were Dutch, and the structure is not abusive. The B.V. applies the exemption itself and reports it in the dividend tax return.
Does Luxembourg withhold tax on liquidation proceeds?
No. Liquidation proceeds are not treated as dividends for withholding tax purposes. Since 2025 the redemption of an entire class of shares is also treated as a partial liquidation, without withholding tax, if the conditions of Article 101 LIR are met.
How quickly must the tax be paid?
In the Netherlands, the return and payment are due within one month after the dividend is made available. In Luxembourg, within eight days, on a return filed even when the exemption applies.
I live in Spain. Is the 15% a final tax?
No. Spain taxes the dividend again at the savings rates, from 19% to 30%, and gives a credit for the foreign tax up to the treaty rate. You do not pay twice, but you pay at least the Spanish rate.
Is my UAE company caught by the Dutch conditional withholding tax?
Not in 2026. The UAE was removed from the Dutch list of low-tax jurisdictions from 2024, after it introduced its 9% corporate tax. Bahrain, Bermuda, the BVI, Cayman, Guernsey, Jersey and the Isle of Man remain on the 2026 list.
What happens if the company pays the dividend without withholding?
The tax is still due. If the company bears it, the dividend is treated as net and grossed up: the tax becomes 17.65% of the amount paid instead of 15%.