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The participation exemption lets a holding receive dividends and sell subsidiaries without paying corporate tax again on profit that was already taxed. Every European country has its own version. Enter your case and compare six of them side by side.
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Change any input and the comparison updates. Luxembourg and the Netherlands, where we set up holdings, are highlighted.
Where is the subsidiary?
How is it taxed?
What does it do?
Simplified headline rules for comparison, not advice. Real outcomes depend on anti-abuse rules, substance, holding periods measured on specific dates, and local taxes such as German trade tax. We check your case before you rely on it.
Without an exemption, every holding layer taxes the same profit again. With it, profit moves up the group intact. That is why holding companies exist at all.
Usually 5% or 10%, sometimes with a cost alternative.
From none in the Netherlands to 2 years in France.
Many countries require the subsidiary to pay a normal level of tax.
The PPT, beneficial ownership and substance, on top of the mechanical tests.
Every country adds anti-abuse rules on top. A holding without real management can lose the exemption even when the stake and holding period are right, usually at the worst moment: the first dividend or the exit.
We set up Luxembourg and Dutch holdings with the substance built in from day one.
For low or short-term stakes, the Netherlands: 5%, no holding period, 100% exempt. For investor structures and larger stakes, Luxembourg is often preferred. Germany, Spain and France exempt 95% rather than 100%.
In the Netherlands, Luxembourg and Belgium, yes, in full when the conditions are met. Germany and Spain exempt 95% of gains; France taxes a 12% share of long-term gains.
Most regimes still apply, but many add a subject-to-tax test. Luxembourg needs 8% tax at the subsidiary; the Netherlands only tests passive, low-taxed companies.
Yes, if the holding lacks substance or fails anti-abuse tests. Stake and holding period are only the mechanical part.
Yes. We test every subsidiary against the exemption and the anti-abuse rules, and tell you which holding country fits.