Paying out dividend

Who decides

A dividend is a payout of profit to the shareholders. The shareholders make the decision. The board then approves the payout.

Two tests

A payout is possible if the equity is larger than the reserves that the law or the articles of association require. This is the balance sheet test (balanstest).

The board approves the payout if the company can keep paying its debts as they fall due afterwards. This is the distribution test (uitkeringstoets). For this, look at least one year ahead and put the calculation in writing. The board is liable for a payout that leads the company into payment problems.

Dividend tax

The company withholds 15% dividend tax on the dividend. Within a month after the payout, the company files a return and pays the tax. The shareholder later deducts this withheld tax from their own tax. If the shareholder lives abroad, a lower rate often applies under the tax treaty.

Dividend to yourself or to your holding company

If you receive the dividend personally, you pay tax in box 2 (income tax on a substantial shareholding): 24.5% up to €68,843 and 31% above that.

If the dividend goes to your own holding company, and the holding company has at least 5% of the shares, the dividend is exempt from corporate income tax (vennootschapsbelasting) at the holding company. This is called the participation exemption (deelnemingsvrijstelling). Usually, an exemption from dividend tax also applies then. In that case, too, you file a return within a month.