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Netherlands: Full insight on corporate tax in the Netherlands

Healy Consultants Group PLC
02 October, 2017

Netherlands: Full insight on corporate tax in the Netherlands

When doing business in a new country, apart from exploring the market and potential Client base, important aspect for many businesses is the taxation regime. The Netherlands is a complex matter optimized for certain types of businesses and investments. In comparison to other developed Western European Economies, Dutch tax rates are not as high and enjoy multiple positive tax regimes, making the country an attractive destination for many tax-optimized businesses.

The main aspects of the Dutch tax system are:

  • Standard corporate tax rate of 25%, which is broken down to two brackets. A positively lower rate of 20% applies for corporate income of up to €200,000, while the excess is taxed at the standard, full rate;
  • In case of "participation exemption", all dividends are fully exempt from withholding taxation. However, for other cases, the tax rate is fixed at 15%, unless reduced by a double taxation treaty. Positively, the Netherlands enjoy broad network of 95 double taxation treaties;
  • In comparison to other nearby countries, there are no municipal taxes in the country;
  • There is value added tax (VAT) in Netherlands with moderately high flat rate of 21%. However, lowered 6% rate is applied to certain goods and services;
  • Filling of corporate tax returns must be filled annually within five months from the end of the fiscal year, and should include balance statement and profit & loss statement.

There are several main specialized tax regimes in Netherlands, including:

  • Innovation box regime – This regime targets IP holding companies. Under the regime, profits and royalties derived from intangible assets that are developed in the business are offered a mere minimal corporate tax rate of 5%. There are several conditions to be met in order to participate in the innovation box regime, including, that at least 30% of the company's profits need to be derived from the specific IP patent;
  • Tonnage regime – Targeting maritime businesses, the taxable profits of logistics and shipping businesses are calculated as profit per ton, instead of profits from total exploitation. In most cases, this leads to optimized corporate taxation for a defined period of up to 10 years;
  • Fiscal investment fund regime – corporate income tax for fiscal investment funds is fixed at 0% in the cases where the investment income is generated by shareholders that have participated no later than 8 months after the year end. Such profits can be derived from real estate developments, project developments and part of REITs.

As conclusion, the tax system in the Netherlands is lucrative and significantly optimized to lure investors looking to do business in a quality Western European country, all while minimizing their corporate taxation exposures. Specifically targeting holding, investment and shipping businesses, the Dutch tax system helps the country position itself as a modern tax-optimized gateway into the region.

Tags: Euro

About the Author

Healy Consultants Group PLC

Since 2003, Healy Consultants assists international Clients with company incorporation services worldwide. Our services include: company registration, opening of corporate bank account, accounting and tax services, legal services, jurisdiction comparisons...more.

To inquire more information about global business set up; call us on +65 6735 0120 or email us at email@healyconsultants.com


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