The dividend tax Netherlands is a kind of income tax on payments of dividends to the shareholders of companies. The Netherlands tax law has provisions for a fixed rate on dividends. In case the business meets particular criteria, tax exemptions may apply. Our local agents can give you comprehensive information on tax compliance with respect to any Dutch entity.
The maximum rate for a dividend tax Netherlands is 25%. However, companies do not owe dividend taxes if they fulfil certain requirements for participation exemption. This exemption concerns capital gains and dividends from shares of no less than 5%. Subsidiaries can be eligible for participation exemptions if they are active and pass the tax test (for being taxed in accordance to the Dutch principles). Additionally, less than 50% of the company’s assets can be passive. If a subsidiary meets these conditions, its income from dividends is exempt from taxes.
Dutch companies not qualifying for participation exemption are liable for taxes at the usual corporate rate with respect to profit from shares. If Dutch subsidiaries are subject to corporate tax but they do not meet all criteria to benefit fully from the exemption, they may receive a special credit.
Our lawyers in the Netherlands can provide you with detailed information on the provisions relevant to dividend income.
Dutch corporate taxes
According to the national law companies established in the country are resident and need to pay taxes on any income generated worldwide. Non-resident entities performing activities in the Netherlands owe taxes only with respect to income generated locally.
The Netherlands tax on corporate income is levied for all profits from business activities in the Netherlands, including income from foreign sources, capital gains and passive income.
The Dutch Tax office or ''Belastingdienst'' in Dutch, is the agency in charge of internal revenue and taxation. If you need more details on the Dutch tax system, do not hesitate to contact our local lawyers. We offer comprehensive services with respect to tax compliance. You can also check our article on paying taxes in the Netherlands.
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 19% for up to EUR 200 000 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 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.
Owners of businesses in the Netherlands, including non-residents and immigrants, have to open a Dutch bank account to manage their income and obtain access to different bank services.
Many Netherlands banks open corporate and personal accounts. Service packages can include the benefits of mobile and online banking, extra features and banking advice.
Opening a bank account in the Netherlands
Opening a corporate bank account is mandatory in order to set up a business in the Netherlands. The account is necessary for completing different business transfers and transactions. A bank reference with the history of transactions is also required for the annual financial statement.
Persons employed locally can also open accounts in Dutch banks to their benefit. Their salaries can be transferred directly to the accounts, payments are easier and international money transfers are possible.
The procedure for opening a bank account is simple, especially for personal accounts. Most banks can complete the first steps automatically with the help of an application form available online.
Foreign residents who face difficulties opening an account due to lack of knowledge of the Dutch language can contact our lawyers for assistance. Our teams are able to prepare a power of attorney allowing a particular person to open/manage an account on behalf of business owners who cannot be present in the Netherlands.
Documents needed for opening a Dutch bank account
If you want to open your account personally, you have to present a number of documents to the branch you plan to work with. A personal identification card/passport and a Dutch Citizen Service Number (BSN) (issued upon registration at the municipality) are among the required documents. A contract for employment and a personal or Dutch business address is required.
The papers required for opening a corporate bank account can vary. Documents such as the Business Registration Certificate of the company will also need to be presented.
If you have any questions with respect to corporate banking, please, contact our law firm in the Netherlands. Our team can offer you a wide range of solutions and consultancy with regard to working and living in the country.
Physical and corporate persons who are employed or perform business activities in the Netherlands need to follow the local requirements for taxation. Paying taxes in the Netherlands is obligatory both for companies established in the country and branches of international entities. Substance has a role in the tax status, a business address in the Netherlands needs to be compliant to the substance requirements by the tax authorities.
If you own a business, our representatives can provide you with details on the Dutch Tax System local auditing and accounting principles. We can also assist you with registering a company in The Netherlands.
Corporate taxation in the Netherlands
The taxation of corporations in the Netherlands is based on residency. Companies set up locally are considered as legal entities of Dutch residents, a Dutch Resident Company. They owe corporate taxes with respect to their income generated worldwide. Non-resident companies are taxed only with respect to income generated in the country. The rate of corporate taxes is 19% for yearly profits up to EUR 200 000. Income exceeding this amount is taxed at 25.8% percent. In the coming years the corporate tax rates will further decrease.
The country does not charge withholding taxes on royalties or interest. Dividends are not taxed at the domestic level; otherwise, the tax rate on dividends is 15%. The Netherlands has signed numerous agreements with other states worldwide to avoid double taxation and lower the tax burden on companies.
Other applicable taxes for companies in the Netherlands are the tax for transfer of real estate and VAT (21 percent standard rate and 6%reduced rate). All entities paying VAT in the Netherlands need a registration.
For Dutch companies, the accounting year usually matches the calendar one with 12 months duration. Shorter periods can be considered in the incorporation year. The tax on corporate income is paid annually, up to 5 months after the financial year ends.
The Dutch Tax office or ”Belastingdienst” in Dutch, is the agency in charge of internal revenue and taxation.
Personal taxation in the Netherlands
Dutch residents are taxed with respect to their income worldwide; nonresidents pay taxes only on income generated locally. The principle of taxation of physical persons is progressive with three sections: section 1 applies to income from housing, employment or enterprises; section 2 is for income from substantial interest; section 3 is relevant for investments and savings.
Physical persons are obliged to respect the taxation year and deposit any liabilities before the first of April on the next year. Delays/non-payment are subject to penalties.
If you would like more information on taxes and tax requirements, do not hesitate to contact our agents in the Netherlands.
