TAXATION NETHERLANDS

The corporation tax in the Netherlands is known as "Vennootschapsbelasting" (Vpb). It is a tax levied on the profits of legal entities, including limited liability companies, public and private companies, and certain other legal structures that conduct business activities in the Netherlands. Here are the key aspects of the Dutch corporation tax system:

 

Tax Rate: The standard corporate income tax rate in the Netherlands is a progressive rate system. For 2023, the tax rate was as follows:

• 19% on taxable profits up to €200,000.

• 25,8% on the excess of taxable profits above €200,000.

Please note that these rates will change over time, so it's essential to check the current rates.

 

Fiscal Year: Companies in the Netherlands are generally required to have a fiscal year that coincides with the calendar year (January 1 to December 31). However, it is possible to apply for a different fiscal year if certain conditions are met.

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Taxable Income: The taxable income of a company is determined based on its accounting profit or loss, as adjusted for specific tax rules. There might be differences between accounting principles and tax regulations for certain expenses, deductions, and income.

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Deductions and Allowances: The Netherlands offers several deductions and allowances that businesses can use to reduce their taxable income, including deductions for business expenses, interest costs, and certain investment-related allowances.There quite complex rules for intra-group interest especially where international structures and/or 'tax havens' are involved.

 

Tax Treaties: The Netherlands has an extensive network of tax treaties with many countries worldwide. These treaties aim to avoid double taxation and offer provisions for reducing withholding taxes on cross-border transactions.

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Participation Exemption: Under the participation exemption, dividends and capital gains derived from qualifying subsidiaries (both domestic and foreign) may be exempt from corporate tax in the Netherlands, subject to specific conditions. Under 'Specials' we elaborate on the Participation Exemption.

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Advance Tax Rulings: Companies can obtain advance tax rulings from the Dutch tax authorities. These rulings provide certainty on how certain transactions or structures will be treated for tax purposes. Under 'Specials' we elaborate on the possibility of Rulings.

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Transfer Pricing: Dutch companies that engage in transactions with related parties must comply with transfer pricing rules, ensuring that the prices charged for goods, services, or intellectual property are at arm's length. Documentation is required. Under 'Specials' we elaborate on the requirements for Transfer Pricing Documentation.

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Filing and Payment: Companies in the Netherlands are required to file an annual corporate income tax return with the Dutch tax authorities. The deadline for filing the tax return and paying the tax due depends on the fiscal year-end of the company.

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Please keep in mind that tax laws are subject to change, and the specific details of the corporation tax system may vary based on individual circumstances. Contact us for the most up-to-date and accurate information regarding your tax obligations in the Netherlands.