How to Manage Taxes When Operating a Dutch Subsidiary

Updated on 24 September 2025

Intercompany Solutions is a Dutch based firm that helps foreign entrepreneurs and investors to establish a business presence in the Netherlands. We also assist with a very large array of other complementary services, such as assisting with and filing your periodical tax returns, providing legal support through our partners, and helping you with various formal applications such as VAT or EORI numbers. We also offer secretarial services and ongoing accounting support to ensure your company stays compliant.

If you decide to do business with us, we always do this in a very clear and transparent way. We will first discuss your (future) company’s needs in depth and how these are related to your personal ambitions. Next, we will see what types of services you will need and how we can offer these to you. Once we have both decided on a clear path, we will come up with a competitive and clear quote for the services you need. For example, you can already establish a Dutch BV for an all-in price of €1499. If you decide that you will need extra services, then we will obviously discuss these in great detail with you and how we will be able to meet your needs. Please feel free to contact us directly for personalized advice and information, or take a look at our website to browse our current services and look at the testimonials of previous clients.

Are you interested in establishing a Dutch company?

Starting a company in the Netherlands can be a great idea. Our country has a strong economy, a perfectly central and strategical location in Europe, and a reliable legal and financial system. It’s also a popular choice for international businesses. But before you get started, there are a few important decisions to make. First, think about what kind of business you want to run. Are you starting a tech company? A logistics firm? A pharmaceutical business? The type of industry you will choose matters a lot, because some rules and taxes depend on what your company does.

Next, you’ll need to choose the right legal structure. Many international businesses set up a Dutch subsidiary, often in the form of a BV (Besloten Vennootschap). This is the same as a private limited liability company. It’s a safe and flexible option, because one of the main benefits is that it separates your personal money from the business capital. So, if you become indebted, generally debtors won’t be able to make a claim on your personal money. You can also choose other forms, like a branch office or partnership, but a BV is generally the most common and logical option for foreign entrepreneurs. 

Of course, once your company is set up, taxes come into play. The Dutch tax system is well-organized but can be a bit tricky if you’re not familiar with it. You’ll likely deal with corporate income tax, VAT (value-added tax), and maybe others like payroll tax or withholding tax, depending on your setup. But don’t worry, we’ll walk you through the main taxes later on in this article. For now, just know that choosing the right company type and structure is the first step to getting your Dutch business up and running smoothly.

Most entrepreneurs choose the Dutch BV structure

Like we just mentioned above, when starting a company in the Netherlands, most foreign entrepreneurs go with a Dutch BV. This is short for “Besloten Vennootschap”, which means private limited liability company. This is the most popular company type for both local and international business owners, and for good reason. A Dutch BV has limited liability, which means your personal assets are protected. If something goes wrong in the company, you’re only responsible for the amount of money you’ve invested in it. This gives many entrepreneurs peace of mind.

You can choose to set up a completely new Dutch BV and run your business directly from the Netherlands. This is a good option if you’re planning to stay in the country or want to keep things separate from your other activities abroad, or if you are a new entrepreneur and this is your first startup. But there’s another common route: starting a Dutch BV as a subsidiary of your existing foreign company. This means your main company (your holding company) stays in your home country, and the Dutch BV operates as a branch or child company under it. This structure gives you more flexibility, especially if you want to grow internationally. It also makes it easier to manage risks, taxes, and ownership between different parts of your business.

Whichever option you choose, the Dutch BV is considered to be well-known, trusted, and straightforward to manage. It works well for both small businesses and large corporations. Plus, the Dutch government supports entrepreneurship, and there are many local advisors who can help guide you through the process. So, if you're starting a business in the Netherlands, a Dutch BV is a solid and reliable choice, whether it’s a stand-alone BV or subsidiary. 

Which types of taxes will you have to pay if you own a subsidiary in the Netherlands?

If you start doing business from the Netherlands (or any other country which differs from your home country, for that matter), you need to take into account that you will have to pay taxes overseas. If you incorporate a business in a different country, you will basically owe that country money. There are different types of taxes you can owe, the most common being (corporate) income tax and VAT, for example. You need to make sure that you actually pay these taxes to comply with national laws and regulations, otherwise you can get into some serious trouble. We will discuss adherence to tax laws later on. First, we will outline the most common taxes you will have to pay in the Netherlands when you own a Dutch subsidiary.

1. Corporate income tax (Vennootschapsbelasting)

If your Dutch subsidiary generates profits, it needs to pay corporate income tax on that profit. This is the main business tax in the Netherlands. The tax is calculated on your net profit, meaning what’s left after you subtract all your costs from your income. These costs can be things like salaries, rent, materials, and so on. As of 2025, there are two general corporate income tax rates in the Netherlands:

• 19% on the first €200,000 of profit
• 25.8% on any profit above that

So if your profit is under €200,000, you’ll pay the lower rate. But if you’re doing well and making more money, the higher rate applies to everything above that amount. The corporate tax return must be filed once a year. You’ll need to provide an accurate financial report and calculate your final profit after all allowable deductions. We strongly recommend hiring a professional to do this for you, such as Intercompany Solutions. We can also assist with the filing of all other taxes mentioned below, so you can be sure about the fact that you run a smooth ship, so to speak. 

2. Dividend tax (Dividendbelasting)

When your company pays dividends, which are profits paid out to shareholders, the Dutch tax office takes a small cut of this amount. This is called dividend tax, and it’s a flat rate of 15%. Let’s say, your Dutch subsidiary decides to pay out €10,000 in dividends to you as the shareholder. The company must first withhold €1,500 (15%) and pay that to the tax office, and you’ll receive the remaining €8,500. Later, depending on tax treaties and where you live, you may be able to claim back part of that 15% in your home country to avoid double taxation. Please note: if your holding company owns the BV, and both are based in the EU (or another treaty country), no dividend tax may be required under special exemptions. This is also known as the participation exemption, which we have covered in this article.

3. Value-Added Tax (VAT or BTW)

In the Netherlands, most businesses must charge VAT (in Dutch: BTW) on their products or services. This is a type of sales tax paid by the customer, not the company, but the company needs to collect it and then pass it on to the Dutch tax authorities.

There are three general VAT rates in the Netherlands:

• 21%: The standard rate for most goods and services
• 9%: The rate for basic items like food, medicine, books, and haircuts
• 0%: The 0 percent rate applies to some exports, special and international services

Every business must register for VAT, issue invoices with VAT, and file quarterly VAT returns. At the same time, you also get to deduct the VAT you paid on your own business expenses. For example, if you charged €1,000 in VAT but spent €400 in VAT on your office supplies, you only pay €600 to the tax office.

4. Payroll tax (Loonheffing)

If your Dutch BV has employees, including yourself if you’re on the payroll, you need to withhold and pay payroll tax. This tax is actually a combination of several things, such as wage tax, national insurance, and employee insurance contributions. Every month, your company:

• Pays a portion of your salary directly to the tax office
• Covers some employer-related costs
• Keeps records and reports to the tax authorities

Payroll tax is not a single rate. It depends on the salary level and employee type, and it's automatically calculated by payroll software or a payroll service. It’s important to do this properly to avoid penalties.

5. Personal income tax (Inkomstenbelasting)

As a shareholder or director receiving salary or dividends, you personally may also need to pay Dutch income tax, depending on your situation. Income tax in the Netherlands is split into three “boxes”:

• Box 1: income from work and home, such as salary or freelance income
• Box 2: income from a substantial interest in a company, which is currently 5% or more in a BV
• Box 3: income from savings and investments

So if you own a big part of a Dutch BV and get dividends, you’ll pay Box 2 tax, which is 26.9% on top of the dividend tax. This can sometimes be reduced depending on your home country’s tax treaty with the Netherlands. A tax advisor such as Intercompany Solutions can help you figure out what’s due and where.

6. Innovation Box Tax Regime (optional)

This is not a mandatory tax, but if your Dutch BV develops innovative products, software, or patents, you might qualify for the Innovation Box. This gives you a much lower tax rate (as low as 9%) on profits from your innovations. To qualify, you need to have an approved R&D declaration (called a WBSO) and proof that your innovation adds real value. This incentive is great for tech companies or businesses involved in R&D.

Does the geographical position of your holding have any impact on the types and amounts of taxes you will have to pay in the Netherlands?

Sometimes clients asks us whether it matters where the holding is situated under which the subsidiary falls, when related to paying taxes. In general: yes, the location of your holding company can impact how much tax you pay in the Netherlands, but it depends on several factors. The good news is that the Netherlands has tax treaties with many countries around the world. These treaties are designed to avoid double taxation, which means you won’t be taxed twice on the same profits: once in your home country and again in the Netherlands. That’s a big benefit. However, where your holding company is located can influence the amount of withholding tax you pay on things like dividends, royalties, or interest. For example, if your holding is in a country with a favorable tax treaty with the Netherlands, the tax rate on dividends might be reduced from 15% to 5% or even 0%. 

On the other hand, if your holding is in a country without a treaty or one that’s on the Dutch blacklist (like certain tax havens), you could face higher tax rates or extra scrutiny from the Dutch Tax Office. In short, where your holding company is based can affect the taxes paid by your Dutch subsidiary, but often in ways that can be planned around. If you choose a country with a solid treaty, you’ll likely benefit from lower rates and smoother operations. It's always smart to get advice from a tax expert before setting things up, so you avoid surprises later. We will happily provide you with professional advice regarding this matter. 

Always make sure to file your tax return on time and comply with Dutch tax laws

Running a business in the Netherlands means staying on top of your tax responsibilities. First of all, it’s important to know that you’ll likely need to file several types of tax returns, like corporate income tax (CIT), VAT (BTW in Dutch), and payroll tax if you have employees. We have already discussed all the types of taxes in detail above. Most of these returns are submitted either quarterly or annually, depending on your company’s setup. Deadlines are strict, and the Dutch Tax Authorities (Belastingdienst) expects full accuracy.

Another key rule is the 7-year retention period. This means you must keep all your financial records, including invoices, bank statements, contracts, and digital files, for at least seven years. These records should be well-organized and easily accessible in case of a tax audit. For real estate records, the retention period is even longer, namely 10 years. Even if you close your business, you still need to hold onto your documents for this required amount of time.

Now, what happens if you don’t comply?

If you miss a deadline or submit an incorrect tax return, the consequences can be serious. At first, you’ll probably receive a reminder or fine. But if you continue to ignore the rules, or if the Dutch Tax Authorities suspect fraud, you could face audits, larger penalties, or even criminal charges. Fines can range from a few hundred to tens of thousands of euros, depending on the issue. For serious fraud, jail time is not off the table.

Also, if your administration isn’t in order, the burden of proof flips to you. That means if the tax authority estimates you owe more tax than you reported, it's up to you to prove otherwise. And without good records, that can be almost impossible. So, the message is simple: keep your books in order, file your taxes on time, and stay informed. Not only will it keep your business safe, it also helps you to build a trustworthy reputation in the Dutch market.

Intercompany Solutions can set up your new Dutch subsidiary in just a few business days

If you are genuinely interested in starting a Dutch business, we can assist you during the entire process. The most important part is that you have a solid idea and business plan to start from. Doing business here can be very competitive, so you need to know what you are doing. If you are a startup, we urge you to do research regarding your industry and competition, before you begin anything. If you have an already established business that you would like to expand to the Netherlands, we strongly urge you to also inform yourself about the real possibilities of growth and success. Just because your current company is doing well in your home country or elsewhere, doesn’t necessarily mean it will also achieve success here. 

If you are sure, however, about your plans, then we can help you during every step of the way. You will need to provide us with some basic information to start with:

• The name(s) of (all) shareholder(s) of the future company
• Valid forms of ID of said shareholder(s)
• A preferred company name that we will check for you
• A valid business registration address in the Netherlands

Once we have these documents and information, we can check everything for accuracy and then commence to incorporate your subsidiary at the Dutch notary. If you cannot come to the Netherlands yourself, we can do this entirely remotely via power of attorney. Once your company is actually incorporated, we then go to the Dutch Chamber of Commerce and you will receive your official company registration number. Once you have your VAT number and company registration in place, you can start doing business from the Netherlands immediately.

The many services we can offer you

Intercompany Solutions has assisted hundreds of foreign entrepreneurs from over 50 different nationalities. Our clients range from small one-person startups to multinational corporations, and everything in between. Our processes are aimed at foreign entrepreneurs and, as such, we know the most practical ways to assist with your company registration. We can assist with the full package of company registration in the Netherlands:

• Company establishment in the Netherlands
• Application for VAT or EORI number
• Accounting services
• Secretarial services
• Legal assistance
• Tax services
• General business advice

We are constantly improving our quality standards to continually deliver impeccable services. 

How can Intercompany Solutions assist you today?

Intercompany Solutions has years of experience within the field of Dutch company establishment. In the past, we have assisted thousands of foreign entrepreneurs with the establishment of Dutch companies, ranging from small startups to branch offices and subsidiaries of large multinationals. Therefore, we can assist you in the most effective and practical way, making sure you have all you need to grow a stable and successful business in the Netherlands. We can establish your Dutch subsidiary in just a few business days, which makes it possible for you to start doing business almost immediately.

Next to that, we can also offer assistance with a wide range of extra services that are tailored specifically to your unique business needs. Whether you need assistance with your tax returns, support with VAT and OSS filings, ongoing bookkeeping, or simply general advice about running your Dutch company: we are here to help you during every step of the way. Feel free to contact us anytime with any questions you might have, and we will gladly help you along the way.