Participation exemption

The participation exemption is a corporate tax facility that prevents profits from being taxed twice in the corporate tax sphere. Double taxation may be the case if a company makes profits and then distributes these profits to a shareholder who also has to pay corporate income tax on the profits.

If a corporate taxpayer - often a BV - holds 5% or more of the shares and control rights in another company, the participation exemption applies. As a result, the receiving company does not have to pay tax on the profits it receives.

For more information on the participation exemption and avoiding double taxation, please contact us. We will be happy to advise you.