The Dutch tax office confirms the refund of Dutch dividend withholding tax for stock dividends (bonus shares) issued to foreign individual shareholders

In a recent policy statement (a knowledge group position), the Dutch tax authorities confirmed that a non-resident individual may, under conditions, be entitled to a refund of Dutch dividend withholding tax levied on account of the issue of stock dividends (bonus shares). The position is relevant for international  shareholders because the Dutch withholding tax may not always be fully creditable in the shareholder’s state of residence.

Source and reference

The position concerned is KG:024:2026:1, “Bonus shares and refund of dividend withholding tax under Section 10a Dutch Dividend Withholding Tax Act 1965”, published by the Dutch tax authorities’ Knowledge Group on dividend withholding tax and withholding taxes on 6 May 2026.

Key takeaway

The Dutch tax authorities take the view that the issue of bonus shares qualifies as a taxable distribution for Dutch dividend withholding tax purposes under Section 3(1)(c) of the Dutch Dividend Withholding Tax Act 1965. At the same time, such an issue does in principle not constitute a regular substantial interest benefit for Dutch personal income tax purposes under Section 4.13 of the Dutch Income Tax Act 2001. For non-resident taxpayers, this may create a mismatch: dividend withholding tax is levied, while no corresponding Dutch income tax credit mechanism is available under Section 9.2 of the Dutch Income Tax Act 2001. In those circumstances, Section 10a of the Dutch Dividend Withholding Tax Act 1965 may provide a refund, provided its conditions are met.

Treaty relevance and practical impact

The position is particularly relevant where the applicable tax treaty does not result in a full credit for the Dutch withholding tax in the shareholder’s residence state. For international family-owned businesses, owner-managed structures and cross-border holding arrangements involving individual shareholders, the position is a useful reminder that bonus share issues should be reviewed not only from a substantial interest and treaty perspective, but also from a Dutch dividend withholding tax refund perspective.