Legal Business

Sponsored briefing: Dutch dividend withholding tax exemption for share buybacks by listed companies may be abolished by 2025

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Tax Vanloman

Dutch listed companies may buyback their own shares free from Dutch dividend withholding tax (DWT), subject to certain conditions being met. Based on an adopted amendment to the Dutch Tax Plan 2024, the House of Representatives decided to abolish this exemption as of 1 January 2025. This would mean that share buybacks will be subject to 15% dividend withholding tax. However, a new government, to be formed after the 22 November 2023 elections, could still decide in 2024 not to abolish this exemption. In addition, various alternatives remain available to distribute cash to shareholders free from DWT.

For the avoidance of doubt, companies that have a listing in the Netherlands, but are not tax resident of the Netherlands are and remain outside the scope of Dutch DWT. Such companies are in any event not affected by the proposal.

Legal Business

Sponsored briefing: A brief overview of Dutch alternatives for participation structures

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International Vanloman

VanLoman partners Marc Oostenbroek and Gabriël van Gelder explore the advantages and disadvantages of structures for employee participation commonly used in the Netherlands

Participation structures are an often-used method to bind employees/managers to the company and to share the value increase realised. In the Netherlands generally four kinds of participation structures are used: stock options; stock appreciation rights (SARs); shares; and carried interest.

Legal Business

Sponsored briefing: Guidance on Dutch corporate income tax treatment of payments of premiums and pay-outs under W&I insurances

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International Vanloman

On 18 October 2022, the Dutch Secretary of State of Finance published a formal decree in relation to the Dutch corporate income tax treatment of payments of premiums and pay-outs under Warranty and Indemnity insurances (the W&I insurances). This decree includes the view of the Participation Exemption Knowledge Group of the Dutch tax authorities (the Knowledge Group) in relation to the Dutch corporate income tax treatment of W&I insurances. As W&I insurances are frequently used in M&A transactions, this tax development is relevant for the deal practice.

W&I insurances

Both warranties and tax indemnities play an important role in M&A transactions. By including warranties in the sale and purchase agreement, the buyer aims to get a clear view on the key characteristics and (potential) issues of the target by way of disclosure of information. Next to the warranties, the tax indemnity caters for a proper coverage of any tax liability in respect of any event occurring on or before the transaction date. In order to cover losses arising from a breach of a warranty and claims under a tax indemnity parties can enter into W&I insurances. These W&I insurances have gained popularity in recent years.