DTAA Between India And Netherlands: Tax Relief, TDS Rules & Benefits

Aimed at reducing tax burdens and preventing income from being taxed twice, the DTAA between India and the Netherlands serves as a vital framework for cross-border taxpayers. It clearly outlines taxation rights on various income sources, including dividends, interest, royalties, and capital gains. By offering reduced TDS rates and foreign tax credit provisions, the treaty benefits both Non-Resident Indians in the Netherlands and Dutch residents with income in India. This agreement not only ensures fair taxation but also fosters economic cooperation, encourages bilateral trade, and promotes investment opportunities between the two countries.

DTAA Between India and the Netherlands - Quick Information

For a brief overview, the table below outlines the fundamental details of the tax convention between the Republic of India and the Kingdom of the Netherlands.

Objective of the DTAA Between India and Netherlands

The primary purpose of the India-Netherlands DTAA is to allocate taxing rights between the two countries to prevent the same income from being taxed by both jurisdictions. This treaty aims to stimulate economic growth and cooperation by creating a more predictable and favourable tax climate for businesses and investors, while also incorporating measures to prevent tax evasion and avoidance.

Key Features of India-Netherlands DTAA

The agreement contains several key provisions that define its scope and application. Below are the key features that taxpayers should be aware of.

Scope of the agreement

This treaty applies to taxes on income and capital levied by both countries. In India, it covers income tax (including any surcharge), surtax, and wealth tax. In the Netherlands, it includes income tax, wage tax, company tax, and dividend tax.

Who can claim DTAA benefits (residents, companies, trusts, etc.)?

The benefits under this DTAA are available to any person or entity considered a tax resident of India or the Netherlands. This includes individuals, companies, and other entities that are liable to tax in either country based on their domicile or place of management.

What are the Tax Relief Methods Used in the India-Netherlands DTAA?

The agreement primarily uses the tax credit method to eliminate double taxation. This means that the country of residence will provide a credit for the taxes paid in the country where the income was sourced, thereby preventing the same income from being taxed twice at the full rate.

DTAA Rates Between India and Netherlands

The DTAA Rates Between India and the Netherlands are generally lower than standard domestic rates.

Interpreting the Treaty: The Role of Case Laws

While the DTAA provides the rules, its application can be complex. This is where judicial rulings become important. Over the years, various cases and laws have provided crucial clarification. For instance, there are numerous DTAA between India and the Netherlands, including dividend case laws where courts have interpreted the conditions under Article 10 for the lower 10% tax rate. These rulings help taxpayers and authorities understand the precise intent of the treaty, especially in addressing specific DTAA issues.

What are the Documents required to claim DTAA TDS?

To benefit from the lower Tax Deducted at Source (TDS) rates, a non-resident must provide the following essential documents to the Indian payer:

• A valid Tax Residency Certificate (TRC) from the Dutch tax authorities.
• A self-attested copy of the Permanent Account Number (PAN) Card.
• A duly completed and signed Form 10F.
• A declaration confirming that the recipient is the beneficial owner of the income.

How to Claim DTAA Benefits?

The procedure for claiming benefits under the treaty depends on your country of residence and the source of your income.

In India (for Indian residents earning in the Netherlands)

• Step 1- Report Global Income: As an NRI filing tax return in India, you must declare all income, including any earned in the Netherlands.
• Step 2- Provide Proof of Tax Paid: You must furnish official proof, such as tax payment receipts from the Dutch authorities, confirming the tax paid in the Netherlands.
• Step 3- File Form 67: It is mandatory to file Form 67 online before submitting your Indian tax return. This form is a statement of foreign income and taxes paid.
• Step 4- Claim Foreign Tax Credit (FTC): You can then claim a credit for the Dutch taxes paid against your Indian tax liability. For managing your finances, knowing the difference between NRE and NRO accounts is also beneficial.

In the Netherlands (for NRIs earning in India)

• Step 1- Submit Documents in India: To avail the lower DTAA between India and the Netherlands on dividend or interest, you must provide your TRC, PAN, and Form 10F to the Indian payer.
• Step 2- Ensure Lower TDS Deduction: The Indian entity will then deduct tax at the concessional treaty rate (e.g., 10%) instead of the higher domestic rate. Obtaining a lower TDS certificate for NRIs can also help streamline this process.
• Step 3- Report Indian Income in the Netherlands: You are required to report income earned in India on your Dutch tax return.
• Step 4- Claim Credit in the Netherlands: Under Dutch tax law, you can claim a credit for the tax paid in India, ensuring you are not taxed twice. A clear NRI power of attorney guide can be essential for managing these affairs from abroad.

DTAA TDS Rate Chart (2025) – India-Netherlands

When an Indian person or company makes a payment to a resident of the Netherlands, the DTAA caps the Tax Deducted at Source (TDS) rate, providing immediate tax relief to the recipient.

DTAA Impact on NRIs and Investors

The India-Netherlands DTAA is highly influential and offers significant advantages for NRIs, investors, and businesses operating between the two countries.

• Preferred Investment Route: The Netherlands has become a key jurisdiction for foreign companies investing in India due to the favourable terms of its tax treaty.
• Lower Tax on Passive Income: The 10% cap on taxes for dividends, interest, and royalties (under Article 1) is a major incentive, as it increases the net returns for investors.
• Capital Gains Tax Exemption: The treaty provides benefits regarding capital gains on the sale of shares, which has been a significant factor in routing investments through the Netherlands.
• Stimulates Trade and Services: By reducing the tax friction on fees for technical services, the treaty encourages the exchange of technology and professional expertise between the two nations.
• Certainty for Property Investment: For NRIs investing in Indian property, the treaty provides clear rules on how capital gains will be taxed, which is crucial for financial planning.

Know More How DTAA Works in India with Different Countries:

How NoBroker Can Help with NRI Services?

Navigating the complexities of the DTAA between India and the Netherlands, especially with its various interpretations through case laws, can be daunting. NoBroker offers exclusive NRI services to simplify these challenges. Our team can help with property management, rental agreements, and expert guidance on tax compliance. We assist with legal steps like legal due diligence for NRIs investing in Indian real estate, ensuring your investments are secure and managed efficiently.