Germany - Netherlands Double Tax Treaty

Germany and the Netherlands signed a new double taxation agreement (DTA) in 2012, thus renewing the former convention which dates back from 1959. The new treaty provides a comprehensive model following the regulations provided by the Organization for Economic Cooperation and Development (OECD). Our law firm in Germany can offer assistance on the main provisions available for both natural persons and legal entities, tax residents of Germany and the Netherlands. It is important to know that the agreement is mutually applicable in the contracting states and that it is available for similar taxes. 

 

 

The main object of the treaty for the avoidance of double taxation is represented by the taxation system applicable to tax residents of a country, performing taxable activities in the other country. Dutch investors interested in setting up a company in Germany must know that the withholding taxes on dividends are applicable at the rate of 15%, while the authorities of both countries have established a full tax exemption on interest and royalties. 

 

 

Investors who want to register a company in Germany should also know that if a company performs business activities for a period longer than 12 months, it will be considered a permanent establishment. The convention stipulates that in this category are included building sites, the offices of a company or construction projects. Our German law firm can offer a more extensive definition referring to the permanent establishment under the Germany – Netherlands DTA. 

 

It is also important to know that the Article 5 of the treaty stipulates a new meaning for the permanent establishment when referring to activities carried out in the territorial seas. Thus, companies operating in this regions for minimum 30 days (calculated in a period of 12 months) are to be considered permanent establishments. 

 

Businessmen who are interested in receiving further information on the Germany – Netherlands double taxation treaty are invited to contact our German lawyers.