The Netherlands and its taxation system offer many special benefits to international investors. Corporate taxation in the country varies depending on the taxable profit of businesses: there are two rates determined by the amount of income. Our local lawyers are available to assist you in opening a company and fulfilling the requirements for your full corporate tax compliance in the Netherlands.
Corporate taxation in the Netherlands
Any business incorporated in the Netherlands is regarded as a resident company liable for corporate taxes. Resident entities owe taxes with respect to income obtained worldwide while non-resident ones are taxed only on the profit generated in the country.
The rate of corporate taxes is 15% for up to EUR 395 000 of taxable yearly income and becomes 25.8 % for amounts exceeding this value. Corporate tax is charged for any profits generated from business activities in the Netherlands, including income from trading, international operations, passive and source incomes, etc. In principle, all costs connected to the activity of the company are deducted from the total profit. The rates were lowered to 15-25% in 2021.
The Dutch Tax office or ”Belastingdienst” in Dutch, is the agency in charge of internal revenue and taxation.
Exemptions of corporate tax Netherlands
Certain items of the income are exempt from corporate taxes. These are dividends and capital gains obtained from particular subsidiaries and profits generated by foreign businesses. This is regulated in the subsidiary-parent directive.
Local subsidiaries are eligible for exemption from Dutch corporate tax if they are active and the Dutch parent company holds at least 5% interest. These subsidiaries must undergo a test showing whether they qualify for exemptions. The parent company will be eligible for participation exemption in case they are already charged with reasonable taxes in the country where the subsidiary is located. Similarly, a subsidiary would qualify for participation exemption in case its passive assets do not exceed 50 % of the total assets.
Our lawyers in the Netherlands can provide you with further details about corporate tax exemptions and their application with respect to your Netherlands company.
Other characteristics of corporate taxation
The tax system in the Netherlands offers different reliefs and benefits. Certain budget allocations, for instance, apply for development and research activities. Such allowances reduce the company’s taxable income. Similarly, companies working in the field of export and import can take advantage of a special tax regime with respect to tonnage available for companies dealing with shipping.