In the Dutch income tax, a substantial interest is, among other things, the situation in which you as a taxpayer, whether or not together with your partner:
- Are a shareholder of at least 5% of the issued capital (or of a particular type) in a domestic or foreign company (consider the private company with limited liability or the public limited company).
- Own at least 5% of the profit-sharing certificates of a domestic or foreign company
- Own the voting rights to at least 5% of the votes in a cooperative or an association on a cooperative basis
- Own the options to at least 5% of the shares (also per type), to be acquired in a domestic or foreign company
In addition, a substantial interest may also be present in a closed-end common fund.
Benefits from a substantial interest
In principle, you may enjoy two benefits from a substantial interest:
Examples of regular benefits are dividend payments from the private company in which you have a substantial interest. The regular benefits are taxed at 25%.
Apart from the fact that tax is levied when you enjoy regular benefits, there is also taxation on the (fictitious) disposal of your substantial interest. The capital gains are calculated on the basis of the difference between the (fictitious) sale price and the purchase price of your substantial interest. These gains are also taxed at 25%. In particular in case of sale, business succession, death, liquidation and gifts, tax levy on the substantial interest is an item to be addressed. In case of an (intended) immigration or emigration as well, the substantial interest deserves attention.