Dutch companies that issue bonus shares from profit reserves may need to withhold 15% dividend tax on their nominal value. The tax can fall due even when the shareholder receives no cash. A foreign shareholder must use a separate procedure to seek any refund.
Why this matters
The company normally files and pays dividend tax within one month after the shares become available. A possible refund does not extend that deadline. The company or shareholder must therefore fund the withholding. If the company pays it, cash leaves the business and the shares may lose economic value. A qualifying shareholder in another EU or EEA country may claim a refund under Article 10a. The shareholder must submit and support that claim separately.
Example
A Dutch company issues bonus shares from profit reserves with a nominal value of €200,000. At 15%, it must account for €30,000 in dividend tax. Its foreign owner receives shares, not cash. Yet someone must fund the €30,000 before the filing deadline. A refund may follow later, but the money remains tied up while the claim is processed.
XTROVERSO tips
- Check the source of the shares. Confirm that the issue is charged to profit reserves. Record the nominal value in the board resolution and accounting file.
- Put tax on the board calendar. Set the distribution date, filing deadline and payment deadline before approving the issue. Include the cash needed for the withholding.
- Agree who funds the withholding. State whether the company will recover the tax from the shareholder. Do not leave the cost allocation unstated.
- Build the refund file early. Collect residence evidence, the board resolution, share-register update, tax return and payment proof. Assign one person to manage the claim.
- Check the applicable treaty. Read the treaty, protocol and effective date for the shareholder’s country. Check whether foreign tax-credit relief is available.
- Keep records for later transactions. Store issue documents and any refund decision in the permanent tax file. They may be needed for a sale, repurchase or restructuring.
Planning bonus shares for a foreign shareholder? We can map the tax payment, records and refund steps before the board decides
The data, sourcing, and analysis behind this article were conducted by Linda Pavan. AI was not used to identify sources, build the factual basis, or produce the analytical judgment contained here. AI was used only as a drafting aid. The final English text was personally reviewed, edited, and approved by Linda Pavan before publication.
References
- Belastingdienst Kennisgroepen — Bonus shares, non-resident shareholders and Article 10a refund
- Belastingdienst — Current Dutch dividend-tax rate and payer responsibility
- Belastingdienst — Dividend-tax filing and payment calendar
- Belastingdienst — Refund route for foreign recipients of Dutch dividend
- Belastingdienst Kennisgroepen — Domestic treatment and later disposal economics of bonus shares
- Rijksoverheid — Treaty variation and current treaty overview
- Wettenbank — Dutch Dividend Tax Act 1965
