Supreme Court shoots down argument for abolishing dividend tax: report

The Supreme Court shot down one of the Dutch government's main arguments for abolishing dividend tax. The Netherlands' dividend tax is legally very sustainable and not discriminatory for foreign investors. It therefore does not have to be abolished to prevent lawsuits and repayment of taxes, Advocate General Peter Wattel of the Supreme Court wrote in advice to the government, NOS reports.

The government used the legal sustainability of Dutch dividend tax in a European context as an argument to abolish this tax. Foreign investors argue that the Dutch dividend tax is discriminatory because it treats them differently than Dutch investment funds. According to State Secretary Menno Snel of Finance, 11 thousand restitution requests were submitted by foreign funds, 7 thousand of which ended up in court. In the worst case scenario, the Netherlands would have to repay 1.7 billion euros in dividend taxes.

In a similar case on dividend tax in Denmark, the European Court ruled in June that Denmark discriminates with its dividend tax. But according to Advocate General Wattel, the Dutch dividend tax is not in conflict with European law. While the Dutch tax does treat foreign funds differently, they do not benefit from it and the only disadvantage they face is a large and expensive administrative burden. Dividend tax therefore does not have to be abolished, minor adjustments would be sufficient.

The Supreme Court usually only publishes advice two weeks after multiple parties were given the chance to look at it. The publication of this advice was accelerated due to recent events, a spokesperson said to NU.nl.

On Friday Unilever scrapped the planned move of its head office to Rotterdam due to growing protest from British shareholders. Later on Friday Prime Minister Mark Rutte announced that the government will reconsider the abolition of the dividend tax.