Dutch Holding Company Tax Benefits
Holding companies are among the most advantageous business entities in the Netherlands due to the beneficial tax regime they are under. Furthermore, Dutch holdings are globally recognized for the conveniences they offer to both foreign and local shareholders.
Investors should keep in mind that holdings are established in order to gather diverse assets of separate companies under a common umbrella. Our Dutch specialists in company formation are ready to assist international entrepreneurs planning to incorporate local holding companies.
Corporate tax and the 'participation exemption' applicable to holding companies
Dutch holding companies are taxed in the same way as other corporate entities in Holland. They need to pay 19% corporate tax on profits up to EUR 200.000 and 25.8% above this margin (2023).
The so-called “participation exemption” is among the advantages of Dutch holding companies, as it provides for full tax exemption on capital gains and dividend payments. Shareholders of Dutch holding companies are eligible for this exemption if they hold no less than 5% of the capital and meet one or more of the requirements below:
- The holding’s parent company should generate higher returns on investments in comparison to the profit arising from the holding’s asset management;
- All assets in the holding company should include less than 50% passive assets, subject to lower tax rates;
- Appropriate taxes, in accordance with the national legislation, are already levied on the holding company.
Our Dutch specialists can provide you with more details regarding the requirements to qualify for a participation exemption. Read more on the Dutch participation exemption.
Other tax benefits relevant for Dutch holding companies
Dutch holdings offer a number of advantages with regard to taxation. They include:
- free profit repatriation allowed by the tax authorities;
- numerous treaties for avoidance of double taxation: Holland has concluded 80+ treaties on double tax;
- advance rulings issued by the tax authorities are an option for all foreign companies operating in Holland;
- interest payments, dividends and royalties are subject to various tax exemptions and deductions.
The Dutch tax regime with respect to holding companies is among the most advantageous in Europe. This is why the Netherlands is an attractive destination for international investors planning to set up holdings. If you need assistance in establishing a holding and further information regarding its taxation, do not hesitate to contact our Dutch consultants specializing in company registration.