Decree regarding international lucrative investments


On Tuesday 23 November a new Decree was published by the State Secretary of Finance regarding lucrative investments in international situations. 

Holding a lucrative investment in international situations is complex. From a Dutch perspective, the benefits obtained with a lucrative investment are (partially) deemed to be a remuneration for performed activities. 

This leads to the question of how these benefits should be taxed in an international situation. The Dutch legislator is of the opinion that there is a connection between the work performed (labour) and the benefits enjoyed (remuneration). At the same time, most other countries do not have such a regime, which leads to difficulties and mismatches in the qualification of the benefits for double tax treaty purposes. 

Previous policy

The State Secretary of Finance has previously indicated that the benefits from a lucrative investment should be considered under the employees’ or (non-executive) directors’ articles. This is in line with the view of the State Secretary that the benefits obtained with the lucrative investment are in part also remuneration for performed activities. 

Generally, that means that the allocation of the benefit should take place on the basis of (physical) working days for employees. For (non-executive) directors this varies depending on the respective tax treaty. This leads to a difficult situation internationally: in case of a dividend or capital gain, the employees’ or directors’ article is usually not applicable from the perspective of the other country. This is a so-called mismatch, which in the worst case may lead to double taxation over the benefit as both countries want to levy tax. 

New policy in international situations

The State Secretary has decided the following in the new Decree of November 2021. 

For individuals who (partly) perform work in the Netherlands and hold a lucrative investment which is deemed to be partly remuneration for work performed in the Netherlands, the benefits under national law are fully taxable in the Netherlands in the first instance. 

Regarding lucrative investments that are held 'directly', whereby the benefits fall under the result from other activities regime in box 1, a pro rata allocation of the benefit may take place on the basis of the tax treaty by applying the employees’ or (non-executive) directors’ article. This of course depends on the facts and circumstances. 

In case of a lucrative investment that is held 'indirectly', the benefits may be taxed under the substantial interest or 'box 2' regime. Please note: there are some conditions that must be met in order to apply this regime. If the benefits are taxed as such, the dividend or capital gains article can be invoked under the applicable tax treaty. 

In short, in an international situation, the following applies under the tax treaty. For a directly held lucrative investment, the employees’ or (non-executive) directors’ article will apply. In case of an indirectly held lucrative investment, the dividend or capital gains article is applicable. 


The new Decree mitigates double taxation risk for certain situations. This will mainly be the case if you, as a non-resident taxpayer, hold an indirect lucrative investment and opt to be taxed under the substantial interest / box 2 regime. At the moment you receive dividends or dispose of your lucrative interest, the country of residence will generally obtain the right to levy taxes. Of course in case of a dividend, the respective jurisdiction may be allowed to levy dividend withholding tax at source.

As said, the Decree does not provide certainty for all cases. It first of all needs to be looked into whether you can invoke the tax treaty and whether the treaty offers sufficient protection in your situation to prevent double taxation.  

Furthermore, with a directly held lucrative investment (box 1), you will need to have the facts and circumstances clear in order to assess which country has the right to levy taxes and over which part. This can still lead to complex situations. 

Finally, regardless of whether you hold your investment directly or indirectly, a lucrative investment is often complex and may sometimes be requalified to employment income in some jurisdictions. Should you hold a lucrative investment in an international situation, we recommend that you have your tax position reviewed.


The Decree also mentions the situation in which an individual holds an indirect lucrative investment (via box 2) and migrates. With emigration, a conservative assessment in box 2 could be imposed. This could lead to a mismatch between the acquisition price of the substantial interest in box 2 and the acquisition price of the lucrative investment. Consequently, the requirements for the application of box 2 may not be met. The benefits from the lucrative investment are then taxed in box 1, instead of box 2. In the Decree, the State Secretary has included an approval for this specific situation to ensure that the box 2 regime can still be applied. 

Unfortunately, emigration is often complex and we advise you to have this looked at more closely if it occurs.

What does this mean for you? 

The present Decree does remove uncertainty in some situations regarding the tax treatment of an international lucrative investment. Nevertheless, it is important to carefully examine your case in order to determine the consequences for you.

Please contact us if you have any questions about the Decree or about a (possible) emigration. In case you have any other questions regarding the lucrative investment regime in general, we are more than happy to assist. 

Contact us

Céline Buys

Céline Buys

Partner, PwC Netherlands

Tel: +31 (0)61 048 49 55

Janet Visbeen

Janet Visbeen

Partner, lid Raad van bestuur, voorzitter Tax & Legal board, PwC Netherlands

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