In Print: Dutch Co-ops: A Primer

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The Netherlands has historically been used as a location for holding, financing and licensing activities for international groups including Canadian multinationals. Co-op structures have recently become increasingly popular and eliminate the necessity of additional planning to avoid the 5% Dutch dividend withholding tax that would otherwise apply.

However, in order to fully reap the benefits of a co-op structure, one should be mindful of the potential application of the Dutch substantial interest rules, and ensure that the articles of the co-op are properly drafted such that the co-op is considered a corporation for Canadian tax purposes.