{"id":4348,"date":"2024-12-15T15:02:48","date_gmt":"2024-12-15T15:02:48","guid":{"rendered":"http:\/\/localhost\/dpetkovski\/?p=4348"},"modified":"2024-12-15T15:02:48","modified_gmt":"2024-12-15T15:02:48","slug":"receive-tax-free-dividends-in-the-netherlands","status":"publish","type":"post","link":"http:\/\/localhost\/dpetkovski\/receive-tax-free-dividends-in-the-netherlands\/","title":{"rendered":"Receive Tax Free Dividends in The Netherlands"},"content":{"rendered":"<p>If you&#8217;re a <a href=\"https:\/\/dpetkovski.com\/index-investing-index-funds-a-gentle-introduction\/\">long-term index investor<\/a> residing in the Netherlands, you can receive dividends tax free.<\/p>\n<p>Although <a href=\"https:\/\/dpetkovski.com\/dividend-investing-is-for-suckers\/\">I&#8217;m not a big fan of dividend investing<\/a>, I still want to share some strategies that <a href=\"https:\/\/dpetkovski.com\/etfs-exchange-traded-funds\/\">ETF investors<\/a> can utilize without much effort.<\/p>\n<p>Basically, you&#8217;d leverage the tax treaties and tax codes of different countries to\u00a0<strong>legally avoid dividend tax<\/strong> in the Netherlands.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_60 ez-toc-wrap-center counter-hierarchy ez-toc-counter ez-toc-white ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\" role=\"button\"><label for=\"item-67c9d7b2116d6\" ><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input aria-label=\"Toggle\" aria-label=\"item-67c9d7b2116d6\"  type=\"checkbox\" id=\"item-67c9d7b2116d6\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"http:\/\/localhost\/dpetkovski\/receive-tax-free-dividends-in-the-netherlands\/#Double_Tax_Treaties\" title=\"Double Tax Treaties\">Double Tax Treaties<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"http:\/\/localhost\/dpetkovski\/receive-tax-free-dividends-in-the-netherlands\/#Irelands_Tax_Treatment_For_Foreign_Investors\" title=\"Ireland&#8217;s Tax Treatment For Foreign Investors\">Ireland&#8217;s Tax Treatment For Foreign Investors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"http:\/\/localhost\/dpetkovski\/receive-tax-free-dividends-in-the-netherlands\/#Avoid_Dividend_Tax_in_The_Netherlands\" title=\"Avoid Dividend Tax in The Netherlands\">Avoid Dividend Tax in The Netherlands<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"http:\/\/localhost\/dpetkovski\/receive-tax-free-dividends-in-the-netherlands\/#FAQs_and_Afterword\" title=\"FAQs and Afterword\">FAQs and Afterword<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Double_Tax_Treaties\"><\/span>Double Tax Treaties<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>All EU countries have tax treaties with each other to prevent <a href=\"https:\/\/europa.eu\/youreurope\/citizens\/work\/taxes\/double-taxation\/index_en.htm\">double taxation<\/a>.<\/p>\n<p>These are applicable when multiple countries are involved, for example being employed in one country while residing in another. And if you paid a <a href=\"https:\/\/dpetkovski.com\/investment-taxes-in-all-eu-countries\">certain type of tax<\/a> in one country, the other country won&#8217;t tax you again for the same thing.<\/p>\n<p>This is also applicable for dividend taxes &#8211; if you&#8217;ve paid them in one country, you won&#8217;t be taxed again on the same amount.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Irelands_Tax_Treatment_For_Foreign_Investors\"><\/span>Ireland&#8217;s Tax Treatment For Foreign Investors<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Ireland doesn&#8217;t impose their <a href=\"https:\/\/www.revenue.ie\/en\/life-events-and-personal-circumstances\/moving-to-or-from-ireland\/dwt-for-non-residents.aspx\">dividend withholding taxes on foreign residents<\/a>.<\/p>\n<p>So if you invest in ETFs domiciled in Ireland as a non-resident, they would distribute the full dividend amount to you without withholding Irish taxes.<\/p>\n<p>Luckily for index investors, most <a href=\"https:\/\/dpetkovski.com\/etfs-exchange-traded-funds\/\">ETFs<\/a> are domiciled in Ireland, probably including the ones you already hold: <a href=\"https:\/\/dpetkovski.com\/iwda-vs-vwce-and-vwrl-for-european-investors\/\">VWRL<\/a>, <a href=\"https:\/\/dpetkovski.com\/cspx-vs-vusa-vs-iusa-my-thoughts\/\">VUSA or IUSA<\/a>, etc.<\/p>\n<p><strong>Pro Tip:\u00a0<\/strong>the ISIN codes of Ireland domiciled funds start with &#8220;IE&#8221; (example IE00B3RBWM25 for VWRL).<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Avoid_Dividend_Tax_in_The_Netherlands\"><\/span>Avoid Dividend Tax in The Netherlands<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In summary, this is the sequence of events:<\/p>\n<ol>\n<li>Ireland distributes dividends to you, applying the Irish non-resident dividend tax rate of 0%<\/li>\n<li>Netherlands doesn&#8217;t charge you dividend taxes because you already paid the applicable rate in Ireland<\/li>\n<\/ol>\n<p>So next time you read about the <a href=\"https:\/\/www.investopedia.com\/terms\/d\/double-irish-with-a-dutch-sandwich.asp\">Double Irish Dutch Sandwitch<\/a> strategy that corporations use, remember that you can also leverage the tax codes of multiple jurisdictions to <strong>minimize your taxes in a legal way<\/strong>.<\/p>\n<p>&nbsp;<\/p>\n<hr \/>\n<h2><span class=\"ez-toc-section\" id=\"FAQs_and_Afterword\"><\/span>FAQs and Afterword<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3>Is This Legal?<\/h3>\n<p>Of course!<\/p>\n<p><strong>Tax avoidance is not tax evasion.<\/strong><\/p>\n<p>You&#8217;re never hiding anything from the tax authorities. You actually <a href=\"https:\/\/dpetkovski.com\/netherlands-file-your-tax-returns-in-3-steps\/\">need to report<\/a> how much dividends you received and from which investments. And then, they charge you \u20ac0 themselves.<\/p>\n<p>Always play by the rules, never lie on your tax declaration, and minimize your taxes legally.<\/p>\n<h3>What If I Use a Dutch Broker?<\/h3>\n<p>It&#8217;s not relevant which broker you use.<\/p>\n<p>As long as the investment itself it domiciled in Ireland, this rule applies.<\/p>\n<h3>What If I Send the Dividends on my Dutch Bank Account?<\/h3>\n<p>It&#8217;s not relevant where and how you send your money.<\/p>\n<p>The dividend distribution itself is the taxable event, which originates from Ireland.<\/p>\n<p>How you manage your cash afterwards is non-taxable anyway.<\/p>\n<h3>Do I Need To Report If I Reinvest the Dividends?<\/h3>\n<p>If you&#8217;re planning to reinvest the dividends, my recommendation is not receiving them in the first place.<\/p>\n<p>Almost <a href=\"https:\/\/dpetkovski.com\/accumulating-vs-distributing-etfs\/\">all distributing ETFs have an accumulating alternative<\/a>, which reinvest the dividends within the fund itself. So they never reach investors&#8217; accounts and thus not creating a bureaucratic burden of reporting them etc.<\/p>\n<p>Check my\u00a0<a href=\"https:\/\/dpetkovski.com\/eu-investors-handbook\/\">EU Investors Handbook<\/a> for detailed analysis on specific ETFs and strategies.<\/p>\n<h3>Can I Use Other Investments?<\/h3>\n<p>You can, but you need to check two things:<\/p>\n<ol>\n<li>The tax treaties between NL and the domicile country of the investment<\/li>\n<li>The tax treatment of dividends distributed from that country to foreign investors<\/li>\n<\/ol>\n<p>While it&#8217;s an interesting rabbit hole to be explored, most UCITS ETFs from the big players (such as <a href=\"https:\/\/investor.vanguard.com\/investment-products\/list\/etfs\">Vanguard<\/a> or <a href=\"https:\/\/www.blackrock.com\/ca\/investors\/en\/products\/product-list\">BlackRock<\/a>) are domiciled in Ireland. So having hundreds of options to choose from, there&#8217;s no point in picking third-tier ETFs that will most probably <a href=\"https:\/\/dpetkovski.com\/why-the-stock-market-always-goes-up\">underperform a broad index in the long run<\/a>.<\/p>\n<p>&nbsp;<\/p>\n<hr \/>\n<p><em>For more intermediate strategies on investing and tax optimization from Europe, visit the free <a href=\"https:\/\/dpetkovski.com\/eu-investors-handbook\/\"><strong>EU Investors Handbook<\/strong><\/a>.<\/em><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you&rsquo;re a long-term index investor residing in the Netherlands, you can receive dividends tax free. Although I&rsquo;m not a big fan of dividend investing, I still want to share some strategies that ETF investors can utilize without much effort. Basically, you&rsquo;d leverage the tax treaties and tax codes of different countries to&nbsp;legally avoid dividend&nbsp;&hellip;<\/p>\n","protected":false},"author":1,"featured_media":4397,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,16,21,17,22],"tags":[],"ppma_author":[4],"class_list":["post-4348","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-economics","category-investing","category-netherlands","category-stocks-etfs","category-taxes"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Receive Tax Free Dividends in The Netherlands - D. 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Petkovski","@id":"http:\/\/localhost\/dpetkovski\/#\/schema\/person\/ce4d9bf1ba43635723c9d1b513b58049"},"headline":"Receive Tax Free Dividends in The Netherlands","datePublished":"2024-12-15T15:02:48+00:00","dateModified":"2024-12-15T15:02:48+00:00","mainEntityOfPage":{"@id":"http:\/\/localhost\/dpetkovski\/receive-tax-free-dividends-in-the-netherlands\/"},"wordCount":632,"publisher":{"@id":"http:\/\/localhost\/dpetkovski\/#\/schema\/person\/ce4d9bf1ba43635723c9d1b513b58049"},"articleSection":["Finance &amp; Economics","Investing","Netherlands","Stocks &amp; ETFs","Taxes"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"http:\/\/localhost\/dpetkovski\/receive-tax-free-dividends-in-the-netherlands\/","url":"http:\/\/localhost\/dpetkovski\/receive-tax-free-dividends-in-the-netherlands\/","name":"Receive Tax Free Dividends in The Netherlands - D. 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Petkovski \ud83d\udcd3 The Author\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Husband &amp; Father Software Engineer\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0StrengthCentric \u20bfitcoin Hodler\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0Long-Term Investor\u00a0 \ud83c\udf0d Everything Enthusiast \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\ud83d\udd25 Optimist READ MORE","sameAs":["https:\/\/facebook.com\/dpetkovski","https:\/\/www.instagram.com\/strengthcentric\/","https:\/\/twitter.com\/petkovskix"],"url":"http:\/\/localhost\/dpetkovski\/author\/petkovski\/"}]}},"authors":[{"term_id":4,"user_id":1,"is_guest":0,"slug":"petkovski","display_name":"D. Petkovski","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/?s=96&d=mm&r=g","user_url":"","last_name":"","first_name":"","description":"<span style=\"font-size: 23px\">D. Petkovski<\/span> <br> <br>\r\n\r\n\ud83d\udcd3 The Author\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0  \u00a0 \u00a0 \u00a0 \u00a0<span class=\"css-1qaijid r-bcqeeo r-qvutc0 r-poiln3\"><img class=\"emoji\" role=\"img\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/14.0.0\/svg\/1f46a.svg\" alt=\"\ud83d\udc6a\" \/> Husband &amp; Father <\/span>\r\n<br>\r\n<span class=\"css-1qaijid r-bcqeeo r-qvutc0 r-poiln3\"><img class=\"emoji\" role=\"img\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/14.0.0\/svg\/1f5a5.svg\" alt=\"\ud83d\udda5\ufe0f\" \/> Software Engineer\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 <\/span><span class=\"css-1qaijid r-bcqeeo r-qvutc0 r-poiln3\"><img class=\"emoji\" role=\"img\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/14.0.0\/svg\/1f4aa.svg\" alt=\"\ud83d\udcaa\" \/><\/span><span class=\"css-1qaijid r-bcqeeo r-qvutc0 r-poiln3\">\u00a0StrengthCentric <\/span>\r\n<br>\r\n<span class=\"r-18u37iz\"><img class=\"r-4qtqp9 r-dflpy8 r-zw8f10 r-10akycc r-h9hxbl r-9cviqr\" src=\"https:\/\/assets.coingecko.com\/coins\/images\/1\/large\/bitcoin.png?1696501400\" alt=\"\u20bf\" width=\"20\" height=\"20\" \/><\/span> \u20bfitcoin <span class=\"css-1qaijid r-bcqeeo r-qvutc0 r-poiln3\">Hodler\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0   \u00a0                            \u00a0 \u00a0 \u00a0<\/span><span class=\"css-1qaijid r-bcqeeo r-qvutc0 r-poiln3\"><img class=\"emoji\" role=\"img\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/14.0.0\/svg\/1f4c8.svg\" alt=\"\ud83d\udcc8\" \/><\/span>\u00a0<span class=\"r-18u37iz\">Long-Term Investor<\/span><span class=\"css-1qaijid r-bcqeeo r-qvutc0 r-poiln3\">\u00a0<\/span>\r\n<br>\r\n\ud83c\udf0d Everything Enthusiast              \u00a0 \u00a0 \u00a0 \u00a0   \u00a0 \u00a0 \u00a0              \u00a0   \u00a0\ud83d\udd25 Optimist <br>\r\n\r\n<p style=\"text-align: left;margin-top:35px\"><a href=\"https:\/\/dpetkovski.com\/about\"><span style=\"background: #15d798;border-radius: 11px;padding: 13px 27px;color: #ffffff;font-weight: bold;font-size: 20px\">READ MORE<\/span><\/a><p>"}],"_links":{"self":[{"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/posts\/4348","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/comments?post=4348"}],"version-history":[{"count":17,"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/posts\/4348\/revisions"}],"predecessor-version":[{"id":5153,"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/posts\/4348\/revisions\/5153"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/media\/4397"}],"wp:attachment":[{"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/media?parent=4348"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/categories?post=4348"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/tags?post=4348"},{"taxonomy":"author","embeddable":true,"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/ppma_author?post=4348"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}