Paying Dividend via a Holding: How It Works

Updated: 2026 Dividend Holding Participation exemption

In a holding structure, dividend flows from the operating BV to the holding BV completely tax-free. Here is how this works and when to extract money to your personal account.

The two-stage dividend flow

In a holding structure, dividend extraction works in two stages:

Operating BV → Holding BV: dividend is tax-free via the participation exemption. No withholding tax, no corporate tax. €100,000 gross dividend = €100,000 received in holding.
Holding BV → Private account: when you need money personally, the holding distributes dividend to you. 15% withholding tax + box 2 income tax (24.5%/31%).

Why is stage 1 tax-free?

The participation exemption (deelnemingsvrijstelling) exempts dividends between group companies from corporate tax, provided the holding owns at least 5% of the operating company's shares. This is a core feature of Dutch corporate tax law and is not an "advantage" per se — it prevents economic double taxation within a corporate group.

Strategic use: defer stage 2

The real power of the holding structure is that stage 2 (personal extraction) is under your control. You can accumulate wealth in the holding for years — growing it at the corporate tax rate (19%) — and only extract personally when you need funds or when box 2 rates are optimised.

Frequently Asked Questions

Does the holding need to do anything special to qualify for the participation exemption? +

The holding must own at least 5% of the operating company. In a standard holding + operating company structure (100% ownership), the exemption applies automatically.