01
A holding BV is built around a group function
A Dutch BV may own subsidiaries, raise finance, manage IP or coordinate investments, but each function changes tax, contracts, risk and the banking profile. Articles, shareholder agreements, resolutions and authority should match actual management.
02
The participation exemption starts at a 5% holding
As a general rule it exempts dividends and gains from a qualifying subsidiary where the BV holds at least 5% of its nominal paid-up capital and the applicable tests are met. Portfolio investments and low-taxed passive interests require a separate assessment.
The participation exemption prevents economic double taxation of a qualifying holding, but it does not turn every Dutch BV into a tax-free shell.
03
The exemption does not remove every tax
The holding BV's own profit, services, interest, royalties and other income are considered separately. Corporate income tax, dividend and conditional withholding taxes, VAT, transfer pricing, interest limitation, CFC and the tax rules of subsidiary and owner countries remain relevant.
04
Substance must evidence decisions and risk
Management location, directors, competence, minutes, premises, people, expenditure, contracts, banking control and risk-taking should fit the BV's role. KVK registration alone does not secure treaty benefits, beneficial ownership or an anti-abuse defence.
05
Distribution and exit are modelled before formation
Dividends, disposal, liquidation, reorganisation, financing and the ultimate-owner payment are calculated before shares move. Legal title, valuation, approvals, reporting, UBO and source of funds form one closing and banking file.
FAQ
Frequently asked questions
Does every holding BV obtain the participation exemption?
No. A qualifying interest and the applicable statutory tests are required.
Does the exemption make the Netherlands tax-free?
No. It applies to specified participation results; other income and taxes remain.
Is substance required?
Actual management, functions and evidence matter for tax, treaty analysis and the bank file.
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