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Tax Specialist Group
Corporate Tax Guide: Netherlands
Netherlands

Members:

The information is valid for the entire country except where indicated. For example, in the case of Malaysia, Labuan is part of Malaysia but has a special tax regime, so this is noted.
The Netherlands
The corporate tax rate shown is the typical corporate tax rate that a domestic corporation owned by non-resident persons would pay. The tax rate does not include withholding tax on dividends, but does include a distribution tax shown separately if applicable. Certain countries have a low corporate tax rate, but charge an additional tax when a dividend is distributed. Because this tax is paid by the corporation, and not deducted from the amount of the dividend itself, it is not a dividend withholding tax. As a result, it typically cannot be reduced by an international tax treaty.
20% on the first EUR 200,000 and 25% on the excess.
The basis of taxation for a corporation will typically be one of:
  • World income (i.e. income from all sources)
  • Territorial (i.e. only income from within the jurisdiction)
  • Territorial and remittance (income earned within the jurisdiction and income remitted into the jurisdiction)
Other basis of taxation are possible, and, if applicable, they are noted.
Worldwide income.
Where non-resident corporation carries on business in a country, business profits may be subject to corporate tax. In addition, a branch profits tax may apply in lieu of dividend withholding tax. This branch profits tax applies to the after tax profits, typically at a fixed percentage. An international tax treaty may reduce the rate of branch profits tax, typically to the rate provided for dividend withholding.
Yes, see corporate income tax rate.
The common forms of business entity are noted. In addition, the entities which are flow through entities for U.S. tax purposes are indicated.
Limited liability companies are the B.V. (private company) and the N.V. (public company); branches of foreign companies; partnerships; and joint ventures, including cooperatives.
Capital gains may be fully taxed, partially taxed or not at all. In certain countries, an exemption, called the participation exemption, will apply to exempt from tax a capital gain from disposition of a substantial holding of shares of a subsidiary. Where a participation exemption is applicable, it is noted together with a summary of the main conditions.
Capital gains are taxed at the regular corporate tax rate.
Participation exemption applies to capital gains on the sale of shares that represent a substantial investment of at least 5%.
Rollover relief may be available in certain cases.
Certain countries allow group taxation, otherwise known as consolidated tax filing. Here the tax returns of a group of corporations in the country may be combined together, which can be useful. If group taxation is permitted, it is noted along with the main conditions.
Group taxation (fiscal unity) is optional with 95% owned subsidiaries, and this ownership gives right to at least 95% of the voting rights. Profits and losses are then aggregated within the group and the parent company is subject to tax for the whole group. All member companies need to have the same financial year and need to be subject to the same tax rules in the Netherlands. Fellow subsidiaries can, in certain cases, form a fiscal unity.
Countries offer various kinds of special exemptions and incentives. Examples are a reduced tax rate, a tax holiday, a tax credit on the purchase of equipment, special accelerated deductions for deprecation, incentives for R&D, and various others. Here the major items are noted.
  • Innovation Box: Income derived from a self-developed intellectual property is effectively taxed at a rate of 5% provided certain conditions are met.
  • General Investment Deduction: Deduction granted for small-scale investment up to EUR 311,242. Also, deductions are granted for energy-saving investments and environmental investments.
  • Tonnage Tax: Companies engaged in shipping may elect to report taxable income based on the net tonnage of the ship.
Many countries have thin capitalization rules which limit or deny the deduction of interest expense in certain circumstances. For example, if debt exceeds three times equity, a proportionate amount of interest expense may not be deductible. Limitations take various forms, restricting the interest expense deduction to a percentage of profit, deeming the debt to be equity and the interest to be a payment of dividends, and various other rules which may blend of these principles. Where a country has thin capitalization rules, they are briefly described.
No, but numerous rules limit the deduction of interest on certain loans, particularly from affiliated or related parties.
Many countries have transfer pricing rules. They very often follow the OECD guidelines and the arms length principle. Some countries have specific rules which apply in certain cases. In addition, some countries allow for a selection of the most appropriate transfer pricing methodology in the circumstances, while other countries follow a hierarchy of methods, with the CUP method (comparable uncontrolled price) often ranking first. The transfer pricing rules are briefly explained.
Yes. OECD rules. Hierarchy of methods: transaction-based methods preferred over profit-based methods.
Obligation to disclose every intragroup transaction in the annual tax return.
Transfer pricing documentation is required.
Many countries tax passive income earned in controlled foreign corporations (CFCs) on an imputation basis while active income is not taxed. Such CFC rules are usually complex and vary significantly in what is considered passive income, and how foreign tax paid is taken into account. Some countries approach CFC rules on the basis of whether or not the foreign corporation is resident in a low tax jurisdiction or a tax haven. This may be done through a black list of countries.
The general overview of CFC rules is described in simple terms.
No, but passive investment subsidiaries (holding of 25% or more) established in low-tax jurisdictions must be revalued at fair market value each year, and the gain may be subject to corporation tax if located in a jurisdiction with a tax rate below 10% (calculated on a Dutch tax base).
Profits repatriated by way of dividends from a subsidiary to a parent company are typically taxed in one of three ways:
  • The dividends are exempt of tax.
  • The dividends are deductible from taxable income, but not fully (90%, for example, of the dividend is deductible).
  • The dividend is taxable, grossed up to the pre-tax amount, and a foreign tax credit claimed for foreign taxes paid.
The applicable method is noted.
Participation Exemption: Total exemption for a dividend distributed to a Dutch entity from an entity held by more than 5% of the shares.

Does not apply to dividends received from subsidiaries based in low-tax countries (less than 10% calculated on a Dutch tax basis) unless they have active business.
Most countries allow a foreign tax credit based on a formula, typically net foreign income over the net income times taxes payable. This limits the foreign tax credit to roughly the domestic tax otherwise applicable to the foreign income. There are numerous variations and technical rules in the details of foreign tax credit calculations. Where a foreign tax credit is allowed, the general principles are described.
Yes. On dividends, interest and royalty income. Limited to taxes withheld from treaty countries or certain developing countries listed by the State Secretary of Finance.
Does not apply when the participation exemption applies.
14. Losses
Losses typically can be carried forwards for a period of years, and sometimes can be carried back. Losses may be segregated into capital losses and non capital losses.
No difference between ordinary losses and capital losses. Losses can be carried back for one year and carried forward for nine years.
This can be limited if there is a change of more than 30% in the ownership or a change in the type of business.
It is not practical to list all of the tax treaties which a country has in a simple guide like this. Accordingly, a link is provided in each case to the tax treaties.
Some countries have entered into Tax Information Exchange Agreements (TIEA).
Treaties are more and more containing provisions that limit benefits (LOB provisions).
Yes
  • Income tax: 108 treaties
  • Estate and gift tax: 7 treaties
  • TIEA: 27
  • LOB provisions not standard.
Withholding tax rates vary considerably from treaty to treaty, and countries may have domestic exemptions applicable in certain circumstances (for example copyright royalties, interest paid to arms length persons, etc.). A table shows the typical rates but cannot adequately summarize all of the details. The applicable treaty should be consulted.
TREATYNON-TREATY
Interestarm's length0%0%
related0%0%
Dividends5% - 15%15%
Rental Real Estate0%0%
Rent Other0%0%
Royalty0%0%
Management Feestreated as income or business profitstreated as income or business profits
Some countries allow for the selection of year-end while other countries specify a particular year-end which all business entities must have. Normally the taxation year cannot exceed 12 months. Where it can exceed 12 months, this is noted.
Generally 12-month calendar year but a different year-end date can be chosen. Tax year can be shorter or longer than 12 months in the year the company is incorporated.
This is the due date for filing a tax return. Where extensions are available, this is noted.
Generally a corporate tax return must be electronically filed within six months after the year-end. Extension can be obtained (max. 16 months).
The typical tax instalment requirements are noted.
Yes, monthly instalments calculated on average of two previous years.
This is the date when the corporate tax owing for the year must be paid. It may be different from the tax return filing due date.
Due 6 weeks after tax assessment is received. Interest and penalties apply for late payments. Normally provisional assessments are payable in the course of the year, which are later offset against the final charge.
This is the period after which the tax department cannot in normal circumstances reassess a taxation year. It is sometimes referenced to the end of the taxation year and sometimes to the date of the first assessment of that taxation year.
The final assessment must be issued 3 years after the ultimate date for filing the tax return. A final assessment may be revised within 5 years or 12 years for foreign income.
If a country has exchange controls, this is noted, together with the main requirements.
No.
23. VAT
A VAT tax system typically provides that the supply of goods and services is classified as taxable, tax exempt, or zero rated. Where a business is engaged in an activity which is taxable, it must charge VAT on its revenue, and can claim a refund of VAT on its expenditures. Where the activity is exempt, it does not charge VAT on its revenue, and cannot claim back VAT paid. Where the entity is engaged in activities which are zero rated (typically agriculture, food services and exports), then it can claim back VAT which it has paid on its expenditures, and does not charge VAT on its revenue.
If a country has a typical VAT system, this is noted. If a country has no VAT system but a sales tax system, this is indicated. Some countries may have a mixture, and taxes may apply at different levels (federal and state for example).
General rate is 21%. Reduced rates are 6% for primary goods and 0% for export goods. Deferred tax on import goods is possible.
Stamp duty, or land transfer tax, can apply on such things as the transfer of shares, land, or the issuance of bonds or debentures. This is described together with the applicable rates.
No stamp duty. Transfer tax of 2% on residential property and 6% on other property in the Netherlands.
If capital tax is payable, this is described. Capital tax may apply in specialized industries, such as banking and insurance, even if a country does not generally apply a capital tax to corporations.
No.
Where significant, other taxes are noted.
Payroll taxes, taxes on certain specific activities (e.g., gambling), taxes on import, additional environmental taxes and gift tax.
Anti-Avoidance Rules take many forms, the most common ones are a general anti-avoidance rule, treaty shopping limitations, the requirement for economic substance (or a business purpose in carrying out transaction) and specific anti-avoidance rules for particular purposes. A very brief overview of the anti-avoidance rules is described.
No general anti-avoidance rule. However, tax authorities can ignore a sham operation.
Authorities can also invoke the fraus legis (abuse of law) doctrine: a transaction or series of transactions may be replaced by another when the decisive motive was tax evasion and the method chosen was contrary to the purpose and intent of the law.
Where a non-resident person holds shares of a corporation established in the country listed, the capital gain which results may be taxable or not taxable depending on the circumstances and, possibly, the existences of an international tax treaty. The general rules are noted.
The gain on the sale of shares by non-resident corporate shareholders is not subject to tax in the Netherlands unless anti-abuse rules apply. For non-resident individual shareholders with a holding of 5% or more, the gain on the sale of shares is subject to 25% Dutch personal income tax.
Where a corporation is acquired through the purchase of shares, sometimes a step up is allowed so that the cost of its assets can be revalued. The main rules are briefly summarized.
Yes, when assets or shares are acquired. Also, a step up is given for the assets if an entity is transferred to the Netherlands.
In some countries, rulings are commonly used (and sometimes even required). In other countries the system is either unavailable or not commonly used except in special circumstances.
It is possible to obtain a tax ruling. There are two sorts of tax ruling: the advance tax ruling (ATR,) which applies to the tax treatment of certain transactions, and the advance pricing agreement (APA), which is intended to establish agreement on the transfer pricing policy.
31. Other
Other important aspects of the tax system are noted.
N/A