On June 27, 2025 the Dutch Secretary of State for Finances sent a letter to the Dutch Parliament. As of January 1, 2024, a number of measures to strengthen the approach to combating dividend stripping have come into effect in the Netherlands. In addition, the previous Dutch cabinet announced further research into possible additional measures against dividend stripping. With this letter, the Secretary of State provides the Parliament with a status update regarding this research and outlines the next steps.
Dividend stripping is highly complex and takes many forms. This makes tackling it challenging. That is why the previous cabinet introduced new measures that came into effect on January 1, 2024. Furthermore in the recent period it was examined whether additional measures are possible. While doing so the research also looked at what the Netherlands can learn from other countries. The research identified the following four potential measures:
i. a net yield approach;
ii. a measure targeting pension funds;
iii. a supplement to existing legislation for cases in which different elements of dividend stripping are spread across various entities within a group; and
iv. a measure similar to the German-Austrian measure.
In the coming period the four aforementioned potential measures will be further developed. When doing so, important aspects ,such as feasibility, minimizing the impact on regular stock market trading, the consequences for citizens and businesses, and compatibility with European law and tax treaties will be taken into account. This autumn the four measures will be submitted for public internet consultation. Following this consultation, the measures will be evaluated, and the cabinet will decide whether or not to propose new legislation.
A net yield approach
The first measure focuses on the so-called net yield approach. This measure aims to prevent someone from receiving a refund or credit for dividend tax when the actual return on the shares does not, or hardly, accrue to that person. A so-called efficiency threshold could be used in this context, allowing many situations with a limited risk of dividend stripping to be excluded from the scope of the measure.
The net yield approach denies a refund or credit for dividend tax if all of the following three criteria are met cumulatively:
i. The total amount of dividend tax exceeds a certain minimum threshold (the efficiency threshold);
ii. As a result of a series of transactions, the price risk on the shares from which the dividend is received is largely hedged; and
iii. As a consequence of point ii, the net return on the dividend is less than a certain percentage of the gross proceeds (for example, less than 15%).
A measure targeting pension funds
The second measure focuses on preventing dividend stripping through pension funds. Pension funds can be used to obtain a refund or exemption from dividend tax on behalf of the actual shareholder, who is not, or less, entitled to such a benefit. Under this measure, a pension fund will no longer be entitled to an exemption or refund of dividend tax if the dividend relates to a business activity that is not connected to its regular activities as a pension fund.
A supplement to existing legislation for cases in which different elements of dividend stripping are spread across various entities within a group
This measure concerns clarifying the rules regarding group structures, clarifying what is and is not allowed.
The research revealed that within groups of related entities and/or natural persons, structures are possible in which the components of a dividend stripping transaction are split up. Although the concept of a ‘series of transactions’ has already been further defined as of January 1, 2024, it may be desirable to clarify the current provision to eliminate any doubt about its scope.
A measure similar to the German-Austrian measure
This measure originates from the research of the regulation that exist in neighboring countries. This research shows that Germany and Austria have a measure in place to combat dividend stripping that also appears to be adaptable to the Dutch system. In both countries, a person is only entitled to a refund or credit of dividend tax if they have genuinely borne the economic risk of the shares over a certain period.
Germany and Austria both have a similar measure that require in order to qualify for a reduction in dividend withholding tax that the beneficiary of a dividend to bear the economic risk related to the underlying shares for at least 45 days around the record date. More specifically, the legal owner of the shares must bear at least 70% of the risk of any potential loss in value of the shares. In addition, both countries apply an annual threshold of €20,000 in dividends for the application of this measure.
Further research is being conducted into whether and how such a measure can be integrated into the Dutch system.
Next steps
The four potential measures described above will be further developed in the coming period. Important aspects will be taken into account, such as feasibility, minimizing the impact on regular stock market trading, the consequences for citizens and businesses, and compatibility with European law and tax treaties. The four measures will be submitted for public internet consultation this autumn. Following the consultation, the measures will be evaluated, and the cabinet will decide whether to propose new legislation.
The letter that the Secretary of State sent to the Dutch Parliament on June 27, 2025 can be downloaded from here. (Only available in the Dutch language)
The IBFD Report for The Netherlands’ Ministry of Finance - "Dividend stripping and anti-dividend stripping approaches in selected countries" that was included as an Annex 1 to the aforementioned letter can be downloaded from here. (Available in the English language)
An example of a net yield approach that was included as Annex 2 to the letter of the Secretary of State can be downloaded from here. (Only available in the Dutch language)
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