Table of Contents
Dutch agreements for the avoidance of double taxation
The Netherlands has concluded a double tax treaty with Germany for the avoidance of double taxation on income capital and other taxes. The treaty also helps regulate other fiscal matters and it helps prevent fiscal evasion. The Dutch have a broad network of double taxation treaties with countries worldwide.
Our law firm in the Netherlands can help you understand the treaty policy in the country if you are a foreign investor from a country with which the Dutch have signed a Double Taxation Agreement (DTA).
The Germany-Netherlands Double Taxation Agreement
The first double tax treaty between the Netherlands and Germany was signed in 1956 and a new treaty that replaced it was signed on April 12 2012. The new treaty is in line with the Organisation for Economic Co-operation and Development (OECD) model, an international standard for these types of bilateral agreements between countries.
The treaty establishes the tax rate for the interest and royalties withholding tax at 0% and the dividend withholding tax is set at 15%. A permanent establishment in one of the two countries is considered to be an office, place of management, a branch in the Netherlands or in Germany, a factory or workshop. Also, building sites and construction and installation projects are considered permanent establishments if their duration exceeds 12 months.
Taxes covered by the Netherlands-Germany treaty
The taxes which are subject to the double taxation agreement are those concerning income and capital. For Germany the taxes are the income and the corporate tax as well as other taxes. The income tax and the corporate tax in the Netherlands are also subject to the provisions of the treaty. The agreement also establishes the taxation of dividends, so that this tax is not levied twice. When one country levies the tax the other will grant a tax reduction or exemption.
For more information about taxation in the Netherlands and investments in the country please do not hesitate to contact our law firm in the Netherlands.