It is therefore recommended that the articles of association provide that the share premium be freely available and repayable at any time, subject to the principle of non-derogability of the share capital and of non-distribution of the legal reserve. An insurance tax is payable on insurance premiums if the insured is a resident of the Netherlands or if the insured object is in the Netherlands. This typically only requires a shareholders resolution, and the procedure can be completed within a day. The concern seems to be that, where the repurchase took place within 3 years of the date of issue, the repurchase could be seen as a right or obligation in respect of the redemption of the shares. Dutch law provides for a number of methods to withdraw cash from a company. How a reduction of share capital can be structured . Deze website kan inhoud of functies aanbieden die door derden op eigen verantwoordelijkheid wordt geleverd. Dutch law provides for certain restrictions, such as (a) repurchase is only possible up to the amount of the freely distributable reserves, (b) only half of the issued share capital may be repurchased and (c) the repurchase is not allowed if more than six months have lapsed after the last financial year without adopting the annual accounts for that year. Dutch dividend withholding tax If you would like to learn how Lexology can drive your content marketing strategy forward, please email [email protected]. In case of a decrease of the nominal value of the shares with 50 per cent, an amount equal to 50 per cent of the initial share capital can be distributed to the shareholder. Issuing shares at a premium is a commonly used practice as par value is often set at a minimum level and does not reflect the true worth of the … 7b of the code on tax harmonization and article 5 para. Functional Currency. This statistic shows the mortgage loan repayment savings products of households with Dutch banks from 2008 to 2019 (in million euros). Deze derden kunnen hun eigen cookies plaatsen, bijvoorbeeld om de activiteit van de gebruiker te volgen of om hun aanbiedingen te personaliseren en te optimaliseren. This will help the involved parties to avoid conclusion of multiple agreements and resolutions and will give flexibility in case the need for capital can not be assessed in advance. The insurance tax rate is 21 per cent. If the company has shares with a nominal value, the repayment … The share premium shall first be converted by means of a notarial deed into a share capital. According to the Dutch Accounting Standard RJ 240.221, capital contributions made by existing shareholders on account of their financial relationship to the entity that are executed conducted without actual disbursement of new shares (or rights to receive or call shares) are to be recognized as share capital premium (in Dutch: agio). I find the email newsfeed useful and of good quality, and in some cases directly on point with issues of concern to the company. Share capital and share premium are both considered to be part of the equity of a BV and therefore both are in principal a tax neutral instrument. Basically, only a substantial interest in a Dutch-based company, income from Dutch real estate (and directly or indirectly related rights) and from profit shares in a Dutch business (other than when derived from securities or employment services) will be taken into account for Box 2 and 3. The ability to access the articles without cost is critical and I hope Lexology continues with the good work. 1bis of the withholding tax code). Subject to the companies articles, the share premium account may be: Used to pay up new shares to be allotted to members as fully paid bonus shares. Under Dutch GAAP share capital and share premium will not impact the Profit or Loss account. Sometimes also with an apostille and an authority statement (in some cases, the formality of legalisation and apostille can be avoided by having the Dutch notary to identify the signee. Share capital can be brought into a company by paying up issued shares in cash or in kind. Additionally, a power of attorney from the company will be required. that share may at the option of the holder be redeemed in whole or in part. The next generation search tool for finding the right lawyer for you. Questions? Before deciding on making a share capital reduction you should obtain suitable legal and taxation advice. In principle, dividends (i.e. Bepaalde inhoud van derden wordt alleen weergegeven als "Inhoud van derden" is ingeschakeld. After the execution of the deed, the newly issued shares can be paid up by the shareholder by means of a transfer to the company. ", © Copyright 2006 - 2021 Law Business Research. The original price from the initial sale of this stock was $5 a share. If the company has shares with a nominal value, the repayment may not result in the nominal capital exceeding the net equity of the company. Are there any pros and cons in regard the use of both options? Understand your clients’ strategies and the most pressing issues they are facing. 20 para. Equity funding may be done either by an issue of new shares or by making a share premium contribution on existing shares in the capital of the company. This decrease of the nominal value can only be realised by means of a notarial deed. Any such resolution to distribute profits or make any other distribution (such as repayment of share premium) requires the approval of the Management Board of the company which approval may be granted on a conditional basis. Until recently, the separate statement was required only when share premium was repaid - it was not required for a repayment of stated share capital. Dit omvat statistieken die door derden websitebeheerder worden verstrekt en de weergave van gepersonaliseerde advertenties door het volgen van de gebruikersactiviteit op verschillende websites. Both kinds of capital can under certain conditions be redeemed without any dividend withholding taxes being levied. A capital reduction typically requires a shareholders resolution, publication in a Dutch newspaper and, if the nominal value of the shares is reduced, a notarial deed of amendment to the articles of association of the company. Capital contributions into a BV, for example in exchange for new shares or as share premium by cash or in kind, or equity allocation to a Dutch branch are not subject to Dutch (capital registration) tax. As funding of a company and the repayment of capital have several tax aspects, e.g. This scenario is often used in case of liquidation of a company. Several exemptions are available (e.g. The capital of a company can be reduced by cancellation of shares or by a reduction of the nominal value of shares. SHARES . A contribution of share premium will require a share premium contribution agreement concluded between the shareholder and the company, plus a shareholder’s resolution. Become your target audience’s go-to resource for today’s hottest topics. Review your content's performance and reach. Such a repayment or relief must be effectuated proportionally in respect of all of the shares, unless, prior to the issuance of shares of a specific type (class), the articles of incorporation already provided that a repayment … An at arm's length principle and several anti-avoidance measures do apply, mainly for intra-group debt structures. Le régime juridique applicable à la prime d’émission se caractérise par sa flexibilité et par la liberté contractuelle. Brief overview of the legal regime for share premium in Luxembourg Bref aperçu sur le régime juridique applicable à la prime d’émission au Luxembourg Luxembourg 06.05.2015 Available languages: EN. Keep a step ahead of your key competitors and benchmark against them. The contribution of share premium and the repayment of share premium can be achieved trough a shareholders decision which allows an easy and quick transit of funds. 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