Company taxation in the Netherlands
Any company in the Netherlands must observe the corporate tax compliance principles in the country. Some of the most important Dutch taxes for companies include the corporate tax (Wet op de vennootschapsbelasting), the income tax (Wet op de inkomstenbelasting), the wage withholding tax (Wet op de loonbelasting) and the value added tax (Wet op de omzetbelasting).
Our accountants in the Netherlands
are ready to give you any information about all the taxes for Dutch companies and guide you throughout the entire process of paying taxes.
The corporate tax in the Netherlands
Companies that are considered Dutch residents are those that have their main management bodies located in the Netherlands or are incorporated according to the Dutch civil law. Resident companies are taxed on their worldwide income, while non-resident companies in the Netherlands are taxed only on their Dutch-source income.
The corporate income tax
is levied on all of the profits produced from running a business, including trading income or foreign-source income, passive income and capital gains. In the Netherlands, the corporate tax is 20%
on the first EUR 200,000 of taxable profits and 25% on taxable profits that exceed 200,000 EUR. A participation exemption
applies in the Netherlands to dividends
and capital gains derived from shareholdings of at least 5% if the subsidiary meets certain criteria.
The value added tax in the Netherlands (VAT)
has a standard rate of 21% and a reduced rate of 6% that applies to certain goods and services. It applies to the supply of goods, the provision of services, the acquisition of goods by businesses and when importing goods. All VAT payers must be registered in the Netherlands. The VAT rate in the Netherlands is also applicable for foreign entrepreneurs who run their business in the country. VAT returns can be filed monthly, quarterly or annually, depending on the amount that needs to be paid.
Companies in the Netherlands must comply with the tax year, which is generally the same as the calendar year and has 12 months, but shorter of longer periods are allowed in the year when the company is incorporated. Corporate income tax returns must be filled annually within six months of the end of the fiscal year. Failure to observe the filing requirements results in administrative penalties.
Income tax in the Netherlands
Dutch residents are taxed on their worldwide income and non-residents are taxed on their Dutch-source income. An individual can obtain Dutch residence if he or she is living and working for a longer amount of time in the Netherlands. According to the legislation, the income received in the Netherlands is categorized in one of three boxes and taxed accordingly:
- box 1: income from employment, enterprise and housing;
- box 2: income from substantial interests (5% and more);
- box 3: income from savings and investments.
Box 1 is taxed at progressive rates of 8.35% and up to 52%, Box 2 is taxed at a rate of 25% and Box 3 is taxed at a flat rate of 30%. For individuals, the tax year is the calendar year and the tax return is usually due until April 1 the next calendar year. Late payments or failure to pay the necessary taxes will result in penalties, and so will late fillings.
Other taxes on companies and individuals in the Netherlands can include: the real property tax, the social security contributions (payable by the employer and the employee), transfer tax, inheritance/estate tax.