One of the best-known international holding structures is the so-called “Dutch sandwich”, in which the shares of a Dutch private limited liability company (BV) are held by a Netherlands Antilles public limited liability company (NV).

 

The “Dutch sandwich” structure can be depicted as follows:

 

 

In essence, the advantages of using a “Dutch sandwich” structure, for investments in other companies (SubCo), can be summarized as follows.

 

The Dutch tax treaties with other jurisdictions and the European

Union (EU) “Parent-Subsidiary Directive” generally result in a low withholding tax on dividends paid by SubCo to BV (typically between 0% - 15%).

 

Dividends received by BV from SubCo are tax exempt under application of the Dutch participation exemption.

 

Capital gains realized upon the transfer of shares in SubCo are also tax exempt in The Netherlands, under application of the Dutch participation exemption.

 

Under the tax arrangement for the Kingdom of The Netherlands, a Dutch dividend withholding tax rate of 8.3% applies to dividends from BV to NV, provided that NV holds at least 25% in BV.

 

On payments other than dividends (like royalties and interest), The Netherlands does not levy any withholding tax.

 

BK Group specializes in “cash box” operations. These operations are available to clients that wish to exit their current holding structure.

 

The main idea is that instead of having BV distribute a (final) dividend to its shareholder (NV), the shares are sold to BK Group, resulting in an elimination of Dutch withholding tax.

 

BK Group operates these “cash box” transactions under an advanced “tax ruling” with the fiscal authorities.