Columbia International Affairs Online: Policy Briefs

CIAO DATE: 11/2011

The new Dutch sandwich: The issue of treaty abuse

George Kahale, III

October 2011

Columbia Center on Sustainable Investment


Years ago, international tax lawyers introduced us to the term “Dutch sandwich.” The concept was to sandwich a Dutch company between an investor from country A and its investment in country B. The combination of the extensive network of Dutch tax treaties and investor-friendly domestic Dutch tax law meant that country A's investor could reduce withholding tax on dividends out of country B and perhaps eliminate capital gains tax altogether by structuring its investment through a Dutch company.