Dutch cooperative

Dutch Cooperative – attractiveness

The Dutch Cooperative has a long tradition in the agricultural bank sector. In the last 5 years the use of a Dutch Cooperative (Dutch Coop) has grown explosively for investors using it as a holding company. Main reason why the Cooperative in the Netherlands is used, is because of the fact that dividend distributions to the members of the Dutch Coop are in principle not subject to Dutch dividend withholding tax.

Dutch Coop – frequently asked questions:

Please find below frequently asked questions about the Dutch Cooperative:

The Key characteristics for a Dutch Cooperative are:

  • The Dutch Coop has a legal personality. Instead of shareholders it has members.;
  • The Dutch Coop is incorporated by at least two members;
  • The liability of the members of the Dutch COOP can be excluded in the statutes;
  • The Dutch Coop is subject to corporate income tax in the Netherlands and is seen as tax resident under Dutch tax treaties.
  • The Dutch Coop is not subject to Dutch dividend withholding tax on profit distributions (except in abusive situations when Coop has no real function)
What is seen many times is that the Dutch Cooperative is interposed between an investment fund with all the investors and the company which will be taken over (target company). In order to avoid tax leakage or tax risk, usually a Dutch BV will own the target companies. Consequently, the Dutch BV will be hold by the Dutch Coop (holding company) and together form a fiscal unity.
From a Dutch tax perspective minimal substance is required. In order to avoid discussions / challenges from the tax authorities of the target company, the best is to have at least the following substance requirements:

  • At least 50% of the directors are Dutch residents
  • Having a Dutch bank account
  • Maintain the financial administration in the Netherlands

Another possibility to have certainty about access to the tax treaty, is to have an office with (skilled) staff in the Netherlands. As a result, this staff can apply for the 30% ruling where employees receive 30% of their income tax free which is huge tax benefit for employees. Therefore, the 30% ruling is very attractive instrument for employers to attract high qualified/skilled personnel.

Dutch Cooperative attractive vehicle

As described above the Dutch Coop can be an attractive vehicle in private equity / investment structures. Before the whole structure with the Dutch Coop is set up, we will obtain an advance tax ruling at the Dutch tax authorities, which ensure the tax treatment of the cooperative and its members.

For more information please see our powerpoint presentation about the Dutch Coop. Click here for it.

More info about the services of MFFA Tax Advice?

MFFA Tax Advice can assist you with:

Would you like more information?

You can contact us through our contact form or call 085 00 30140 from within the Netherlands, or +31 (0)20 2615615 from abroad.

Also see the website of the Dutch tax authorities.