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Taxation System in Netherlands

  • If the company has 50% of the passive assets it is exempted from the 25% tax slab levied over as Capital gain tax.
  • Business entities that are locally registered are exempted from the royalty and interest payments
  • 6% property tax is levied annually as the rental and 6% of transfer tax is levied if the company acquires any land in the Netherland.

We provide you end-to-end services needed for incorporating the company. Right from documentation and implementation to following the accounting & financial procedures and preparing budgets, our team will assist you in each step.

Dutch Corporate Income Tax

The standard corporate tax levied on companies is 25%, however, companies which fall under the profit-making slab of €200,000 annually, it is charged with only 20%. Moreover, the tax returns of the company income tax should be filed within 5 months before the financial year ending. There are several advantages in the Dutch tax system benefitting the companies

Double Tax Treaty

  • With the help of bilateral tax treaties signed with more than 100 countries, you have the benefit of saving a lot of money from double taxation. Turkey is one of the countries which offers several benefits in terms of tax savings on dividends, interest, and royalties.
  • Complete transparency in the tax structure, tax consequences, and proposed tax.
  • Effective financial structure and tax consolidation for Dutch activities in the company
  • No kind of withholding tax on the interests or royalty payments going out
  • Special tax programs which help in saving 30% of the income tax for qualified and skilled employees from foreign countries.
Dutch Quick Tax Facts for Companies
Corporate income tax rate 20%/25%
Branch tax rate 20%/25%
Capital gains tax rate 0%/25%
Basis of taxation for residentsWorldwide
Abroad Participation Exemption Yes
Loss relief
- Carryforward
9 years
− Carryback1 year
Double taxation relief
Yes
Tax consolidationYes
Transfer pricing rulesYes
Thin capitalization rules No
Controlled foreign company rulesNo
Withholding Tax
− Dividends0%/15%
− Interest0%
− Royalties0%
− Branch remittance taxNo
Capital tax No
Real estate transfer tax 2%/6%
Inheritance/gift tax10%-40%
VAT
21% (standard rate)/6% (reduced rate)

Withholding Taxes

Dividends

The standard withholding taxes on the dividends is 15%. In addition, the dividends received from foreign countries are also exempted from the taxes if at least 5% of the ownership is by the Netherland company  is owned by Also, dividends received from a foreign entity will be tax-exempt if The Netherlands company owns at least 5% stake in the foreign entity and 50% of the company assets are passive.

Interest

As per the standard norms in Netherland, the tax is not levied on the interest except the withholding tax on the dividend especially on the interest of profit sharing bonds.

Royalties

As per the standard norms in Netherlands, no kind of taxes are charged on the royalties.

Branch Remittance Tax

As per the standard norms in Netherland, no kind of tax is charged on the profits made by the branch.

Wage Tax/Social security Contributions

As per the standard labor regulatory norms, it is mandatory for the employers to make a contribution of 31% on all the payments made to the employees in the form of salary. Any company which is registered resident of the under Dutch laws, it incurs a minimum payroll tax of 16% which includes – wage tax, insurance, health, etc. contribution. As the companies in Netherland have to bear the cost of occupation accident and health insurance of the employees, it is additional cost for the company which needs to be managed. Moreover, the company also has to offer at least 4 weeks of leaves on pay and the employee should not be asked to work for more than a 60 hours per week. If in case the employee has to be present for the additional work then the remuneration should be revised in the form of overtime.

Value Added Tax

Value Added Tax (VAT) is a standard tax that is levied on every stage of the product production, distribution, services, export, etc. in Netherland.

  • As per the standard norms in Netherland, the amount of tax levied is 21% that is applied to all the goods supplied, services offered, or goods that are imported for business purposes.

Some of the products and services get a discount of 6% on VAT. Such products and services are:

Products

  • food
  • medicine
  • art
  • books
  • newspapers
  • magazines

Services

  • agricultural use
  • passenger transport
  • hotel accommodation
  • labor-intensive

The rate of VAT charged on exported goods are intended to be zero. Such goods are:

  • Sea vessels
  • International Transport Aircrafts
  • Gold for central banks
  • Bonded warehouses activities
  • The VAT tax on the some of the goods transported to EU state members is also none.

Exempted VAT services are

  • educational
  • medical
  • banking
  • insurance
  • postal
  • non-commercial broadcasting
  • journalists
  • composers
  • writers

Accounting, Filing and Auditing Requirements

The annual accounting & tax filing procedures for the companies is bifurcated into three categories based on the size of the company. Depending on the company size, the documents and procedures also vary. Below is the complete structure of filing process:

Small Companies

If your company falls under the category of Small BV category then you need to just submit the balance sheet with an explanatory note. The balance of the smaller BVs should include the details of the total number of fixed assets, net assets, investment details, and obligations. It should also include the information about the current and previous year’s net profit with losses.

Medium Companies

The medium companies are further bifurcated into three more categories like:

  1. Companies with a turnover of 8.8 million –35 million Euros
  2. Company balance sheet with total balance of 4 million – 17.5 million Euros
  3. Company that has at least 50-249 employees

If your company falls in any of the above categories then you need to get your company balance sheet audited along with the P&L statement, management summary and the profit distribution details submitted to the chamber of commerce.

Large Companies

If your company falls under the large companies’ categories then the annual reports with balance sheets, P&L statement, current and previous year results, and audited financial accounts should be submitted.

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