The Chartered Governance Institute - Irish Region

Irish Region

Read Pensions and Tax in the Irish Agenda on Netherlands Double Taxation Agreement.


Ireland: Netherlands Double Taxation Agreement

Ireland and the Netherlands signed a new double taxation agreement (DTA) on 13 June 2019. Procedures are now underway to ratify the new DTA.

This new DTA will replace the existing DTA between Ireland and the Netherlands which has been in place since 1969.

The DTA demonstrates Ireland's approach and commitment to the 'Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS)'. Some notable inclusions in the new DTA are:

  • The provisions in respect of Dual Resident Entities included in Article 4 of the DTA which are in accordance with the Best Practice Rule in BEPS Action 6.
  • A Principal Purpose Test (PPT) in Article 22 in accordance with BEPS Action 6 – Preventing the Granting of Treaty Benefits in Inappropriate Circumstances.
  • The Permanent Establishment (PE) Article includes an anti-fragmentation rule to prevent corporate groups from fragmenting a cohesive operating business into several small operations, to avoid creating a PE.
  • The dividends article now includes a minimum holding period to access the reduced rates of dividend withholding tax (DWT). Interestingly, the old DTA pre-dated the introduction of DWT in Ireland.
  • An Arbitration Article (Article 25) has been included in accordance with BEPS Action 14 – Improving Dispute Resolutions.

In line with Ireland's newest DTA's, the protocol to the DTA confirms that Irish Common Contractual Funds (CCFs) shall be treated as fiscally transparent for the purposes of granting tax treaty benefits.

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