Taxation of Branches in Netherlands
Taxation of Branches in NetherlandsUpdated on Friday 10th September 2021
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In Netherlands the branches and local companies have the same tax treatment according to the Dutch law. However there are some differences, since the branches don’t have to pay certain taxes that are mandatory for other types of business forms. Our Dutch accountants can explain to you what tax obligations apply in your particular case, if you have set up a branch in the Netherlands.
Tax regulations for branches in Netherlands
According to the tax rules in the Netherlands, companies and branches are regarded as equal in terms of the tax rates that they must pay for their profits. As such, if you have extended your foreign company through a branch in the Netherlands, the tax amount that you will have to pay is of 20% for profit less than 200 000 euros and of 25% for profits larger than this amount.
The Dutch government encourages foreign investors to open branches in this country. Therefore, branches are not due to withholding tax payment while the resident Dutch companies must still pay 15% as withholding tax.
You can find out more details about how branches are taxed in this country, by addressing your questions to our accounting firm in Netherlands.
Tax obligations for branches in Netherlands
The branch allows foreign investors to conduct business activities in the Netherlands, an option that representative offices don’t have. Therefore a branch needs to register with the Chamber of Commerce as well as with the Dutch Tax authorities. Branches are not obliged to pay a Dutch capital registration tax, even if there is a capital contribution to the branch.
Wage taxes and VAT regime for branches is the same as for local companies in the Netherlands. The amount will vary according to the nature of the business activities and their volume. Depending on whether you will hire employees and on their number, your branch might be subject to specific taxes.
Feel free to contact our Dutch accounting firm in order to clarify all questions you might have on the tax provisions applying to your branch in this country and on the implications of employee tax for your company.
We also provide solutions for payroll Netherlands, and offer services for branches as well as subsidiaries.