Why Invest in the Netherlands
The Netherlands has always been very welcoming to foreign companies and many businesses with international operations choose the country due to its location, political stability and a beneficial tax regime.
Some of the features that make the country attractive for foreign investors are: the tax treatment of business profits, the participation exemption, no withholding taxes on interest and royalties (in some cases, for interest and royalties taxes are reduced to 0%). The Netherlands also has a broad tax treaty network. The country has signed treaties with more than 80 countries, which guarantees that double taxation on income and capital is avoided.
Accounting in the Netherlands
The Dutch Generally Accepted Accounting Principles (The Dutch GAAP) include all of the Dutch accounting procedures and rules. These principles observe EU Directives. Companies registered in the Netherlands are mainly regulated according to Book 2 of the Netherlands Civil Code. The rules apply to certain types of Dutch legal entities such as NVs, BVs and limited and general partnerships.
In general, the tax accounting period in the Netherlands should not exceed 12 months. Corporate income tax returns must be filed annually, within six months after the end of the financial year.
The 30% ruling in the Netherlands
An individual that is employed in the Netherlands and meets certain criteria is entitled to benefit from extraterritorial costs: a compensation for expenses amounting to 30% of the salary. In order to benefit from the 30% rule, the employee must have specific expertise that is not available or is scarce in the Dutch labour market.
In order to benefit from the 30% ruling, a request must be made within four months after starting the employment. The maximum term for this 30% allowance is 10 years, with additional testing to determine if the employee still meets all the necessary criteria.
Taxation in the Netherlands
One of the features that make the Netherlands attractive for investors is the progressive income tax system. The tax rates are 20% on profits up to 200,000 EUR and 25% for taxable profits that exceed 200,000 EUR. For resident companies taxes apply on their worldwide income and foreign companies are subject to corporate income tax on certain sources of income that are Dutch based.
Our accountants in the Netherlands can provide professional consultancy and expert advice in many accountancy related fields. Some of or services include: tax registration and compliance, accounting and annual tax fillings, debt monitoring and risk assessment. Contact us for more information and a personalized consultancy.