Is a local Dutch director required to incorporate a Dutch BV?

No, it is not a requirement to have a local Dutch director to set up a Dutch BV. In fact, most of our clients are non-Dutch residents.

If you are a small or medium company, or you have a clear goal for your Netherlands business activities. It is likely not relevant to consider the substance requirements for corporate income tax.

Your VAT situation is determined upon application for … Read more

The income included in Box 2 for foreign taxpayers includes the eligible Dutch income (calculated in the same way as for residents) from local companies, except in cases where the shareholding belongs to an enterprise’s equity.

Fiscal partners are subject to special requirements.

The income that must be declared in Box 2 includes the capital gains and/or dividends (main income items) obtained by a foreign taxpayer with substantial interests (>5 percent shareholding) in a resident company minus any losses related … Read more

In Holland a professional investor may use various vehicles on the funds market. UCITS (Undertakings for Collective Investments in Transferable Securities) and AIF (Alternative Investment Fund) are the most common vehicles that can be marketed in the European Union.

Taxation is among the main considerations in investment fund set-up. In this respect Holland is a very attractive jurisdiction.

If you need further information on the taxation of investment funds in Holland, please, contact our advisors in company formation.

Tax treatment

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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

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

An important aspect of the corporate tax system in the Netherlands is the special participation exemption according to which all capital gains and dividends generated by an eligible shareholding are exempted from taxes

Corporate tax in the Netherlands

Generally, all local companies are liable for corporate income tax, or CIT, with respect to their income generated worldwide. For profits up to 200 000 Euro the CIT rate is 20 percent. Any income exceeding this threshold is taxable at a rate … 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

To be eligible for taxation under the IB regimeRead more

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

Holland has a well developed regulatory framework for private businesses, partnerships and corporations. The main elements of the framework consist of: clear rules on financial statements, auditing, and the publication of audits.

Because of the clarity and relative simplicity of the regulations, corporations are able to have a stable base of operations where they can plan for the long term. In this article, we lay out a summary of the requirements for accounting, auditing and publication in the Netherlands. If … Read more