Doing Business in the Netherlands 2012 - American Chamber of ...

18.20 EU Savings Directive
The EU Savings Directive took effect on 1 July 2005, with the aim of
enabling the taxation of savings income in the form of interest
payments. Payments made in one Member State to beneficial owners
who are individual residents for tax purposes in another Member State
fall within the scope of the Directive. After the obligatory exchange
of information from the Member State where the payment originates
to the Member State of which the beneficiary is a resident, the income
may be taxed in accordance with the laws of the latter Member State.
In principle, a zero withholding tax rate applies to payments between
Member States. However, a transitional period is observed for
Austria, Belgium and Luxembourg.
18.21 EU Parent-Subsidiary Directive
The Directive gives complete relief from double taxation in the EU on
dividend income by abolishing dividend withholding tax on dividends
flowing from a subsidiary to its parent company (or to a permanent
establishment of the parent company) within the EU, provided that the
companies have a qualifying parent-subsidiary relationship. The
withholding tax exemption may be applied under the Directive if all of
the following criteria are complied with:
a) The parent company holds a minimum of 10% of the capital
of the subsidiary.
b) Both parent and subsidiary have one of the legal forms listed
in the Annex to the Directive.
c) The parent and subsidiary are companies that, according to the
tax laws of their respective countries, are considered resident
of their respective countries for tax purposes and under the
terms of a double taxation agreement concluded with a third
country. Neither of them is considered a resident for tax
purposes outside the EU.
204 Baker & McKenzie