Introduction withholding tax on interest and royalty payments

In line with previous proposals, the Dutch Ministry of Finance announced to introduce a conditional withholding tax on interest and royalty payments as of 2021. Under the new Withholding Tax Act 2021 (“WHTA” ) a withholding tax will be levied on interest and royalty payments made to certain recipients: to corporate entities that (i) have control and (ii) are residing in a low-taxed jurisdiction. There will be an anti-abuse rule for conduit companies. The WHTA also contains other measures that will amend the Corporate Income Tax Act and the Dividend Withholding Tax Act.

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