In the Netherlands, local companies and branches are subject to the same general taxation regime in accordance to the national law. Still, there are particular differences as branches are not obliged to cover certain taxes required for other business entities. In case you own a Dutch branch our local administrators can check which tax liabilities are applicable in your situation.
Dutch tax regime for branches
The tax regulations in Holland provide for equal taxation of branches and companies with respect to the rates for generated profits. Therefore, if you own a foreign company and decide to establish a Dutch branch, the tax you will need to transfer will be 15% for profit under EUR 395 000 and 25.8% for the amount exceeding this threshold in 2022.
The national government provides incentives for international investors opening branches in Holland. They are not subject to withholding tax, while resident companies pay 15% withholding tax. It is also possible to have clarity on the matter and receive an advanced tax ruling from the authorities.
Our Dutch financial administrators can give you more information about taxation of branches in the Netherlands. Please, do not hesitate to contact them with any questions on this subject.
Branch tax obligations in the Netherlands
In contrast to representative offices, branches allow international investors to perform business operations in Holland. Therefore branches have to be registered at the Commercial Chamber and the Tax Office. They are not subject to tax for capital registration, even if they receive contributions to their capital.
In Holland, the value added tax and wage tax rates for branches are identical to those applying to local companies. The amounts vary with respect to the scope and volume of the commercial activities. The hiring of employees and their actual number may be associated with specific tax liabilities.
Do you have questions regarding the tax regulations applicable to your company’s Dutch branch or the amount of employee taxes that you will need to cover? Please, do not hesitate to get in touch with our Dutch bookkeeping specialists.