If you ever dreamed about setting up an your own business as a young entrepreneur, the Netherlands might just be the place to initiate your endeavor. Not only will you have access to the entire European single market, but this technologically advanced country offers many benefits that will quickly help your business grow. There are many opportunities available, for example to start an online business; you just need to know where to look and when to take action. Read on … Read more
Tax on income generated by substantial shareholding (Income tax box 2)
If a resident of the Netherlands has a “substantial shareholding” (“aanmerkelijk belang”) with respect to an eligible foreign or Dutch corporation, then the income generated by this shareholding needs to be declared in Box No. 2 of the tax return form for personal income.
In case a taxpayer holds directly or indirectly a substantial share of a corporation, then any income obtained from loans or asset provisions to the … Read more
The ruling practice
A characteristic feature of the tax system in the Netherlands is the option to consider the treatment of particular transactions or operations with the tax authorities in advance. The Tax Administration may give you advanced clearance. The National Tax Authorities can conclude two types of agreements with the taxpayers: an Advance Pricing Agreement (APA) or an Advance Tax Ruling (ATR).
APAs are agreements where the Tax Authorities specify the method of pricing that will be applied by … Read more
In Holland, a joint venture is an agreement between at least two companies to unite resources in order to pursue a common commercial goal. Each company keeps its identity and carries liability for the losses and profits of the venture.
The investors involved in the creation of a Dutch joint venture first have to establish two companies in the Netherlands. Joint ventures are not specifically regulated for business arrangements of this type. Still, the companies forming the venture must comply … Read more
If you reside in Holland or receive Dutch income, you need to follow the national laws on taxation. As a resident (living in Holland) or non-resident (foreign) taxpayer receiving Dutch income, you will need to pay income tax in Holland.
Taxable Dutch income types
The Dutch tax laws recognize 3 types of income that are subject to tax. These are classified into boxes. Box 1 concerns income related to home ownership or employment, i.e. salaries, business profit, pension, regular … Read more
International companies that do not reside in Holland can advertise their business interests and establish a presence in the country by opening a representative (liaison) office. According to the national law liaison offices are not classified as legal entities, since they do not function and exist independently; they are fully subordinated to and dependent on the international corporations that have established them in Holland.
Generally, international companies are interested in settling liaison offices in Holland for the purposes of marketing … Read more
The present article considers the steps leading to company mergers or acquisitions in Holland. One such step is an investigation called “due diligence” (or DD). It aims to elucidate the actual state of the respective company. DD allows for the assessment of potential risks with the aim to inform the final decision about the transaction and also to adjust the purchase conditions.
Agreement of confidentiality / non-disclosure
During the negotiation phase of merger and acquisition the parties often sign an … Read more
The tax law in the Netherlands offers a preferential regime for corporate taxation with the aim to promote activities related to investments in novel technologies and development of innovative technology. This is the Innovation Box (IB) regime. For profits meeting the requirements for IB, companies owe a total of 7% corporate tax, rather than the 20 – 25% usually levied (according to the rates for 2018).
Description of the IB regime
Holland has long been attractive for entrepreneurs looking to establish a business due to numerous social, cultural and geographical factors. Its comparatively favorable tax climate is also an important prerequisite in the process of decision-making.
Value Added Tax (VAT)
Value Added Tax has a great influence on corporate cash flows. Generally, a business can request a VAT refund for the amount it has incurred. Still, it may take several months until the tax is recovered through the periodical return. The … Read more
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