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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% shareholding) in a resident company minus any losses related to the shareholding and monumental building tax deductions.

The deductions and personal allowances (“persoonsgebonden aftrek” in Dutch) do not apply for foreign taxpayers that only have income qualifying for Box 2.

The Dutch rollover/tax deferral for eligible legal mergers/demergers and share mergers is not applicable to foreign taxpayers in case the surviving/acquiring company is established outside of Holland. If a Dutch corporation changes its tax residence, then its relocation is considered as a (taxable) substantial shareholding transfer.

An entity established under foreign jurisdiction that has qualified as a resident corporation in Holland for a minimum period of five years but has relocated to another country for the purposes of taxation is considered a resident corporation in Holland for another ten years.

In case the total amount in Box 2 is a negative number, the income is considered as a substantial shareholding loss for foreign residents. Such losses are deductable and can be compensated (loss carryforward or carryback) following the same rules as for resident taxpayers. These losses can be aggregated with any qualifying losses from tax liabilities for resident taxpayers.

The taxable base is determined by special rules if the taxpayer emigrates or the Dutch corporation where he/she is a substantial shareholder transfers its tax seat to a different country.

Our Dutch specialists in taxation can provide consultancy on your tax position. We can prepare and submit your yearly income tax report and take care of other matters related to tax compliance. Please, contact us, if you need further information or tax-related assistance.

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 benefits and owner-occupied real estate. Box 2 covers substantial interest income and Box 3 represents income from investments and savings.

The taxation system in Holland is quite complex and you can end up paying up to one-fourth of your personal income in taxes, but all rates depend on the nature of the work you perform and your residency, among other factors. Persons taxable in accordance with the Dutch laws need to submit their returns in digital form by the beginning of April each year. If it is impossible to keep this deadline due to particular circumstances, an extension can be granted upon request.

Taxes levied on Dutch residents / non-residents

In the form for tax return Dutch residents are obliged to declare their income received worldwide, including amounts that Holland is unable to tax by virtue of international or national regulations. Employment income, business profits and capital gains obtained in foreign countries fall in the list of such revenues. Non-residents can choose whether to be treated as residents with respect to taxation. Persons with status of resident taxpayers must declare their worldwide income permitting the option of taxation of this income in another country. To avoid double taxation, Holland offers tax relief (or tax credit) against owned tax. An experienced Dutch attorney can advise you with regard to the most convenient possibilities for your business.

Dutch corporate income tax (CIT)

Companies in Holland and particular entities established elsewhere and receiving income from Dutch sources are liable for corporate income tax (CIT). Companies with capital consisting of shares, cooperatives and other entities conducting business are on the list of company types subject to taxation. All companies need to file tax returns every year. The deadline for submission is five months after the concerned year’s end. All taxes need to be paid within two months of the receipt’s assessment.

Value Added Tax is, per se, a consumer tax incorporated in the price paid by the end customer for a particular service or product. In line with the EU legislation, VAT is applicable to the provision of goods, services, importation and acquisition of goods. Holland has three different VAT rates: a standard 21% rate, a special 9% rate for drugs, food, newspapers and books, and a 0% rate for international trade to allow for VAT-exempt export of commodities.

If you need further information and personal advice with regard to your business, please, get in touch with our local lawyers.

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.

Even though all companies residing in Holland are generally liable for CIT on their income generated worldwide, profits originating from an eligible shareholding are tax-exempt at the level of the shareholder considered as tax-resident in Holland. This tax exemption is called the Dutch participation exemption (hereinafter referred to as: PE).

The PE has two main purposes. In its purely domestic sense it prevents double taxation of the income of a single enterprise (taxing both the income of the company and of its parent corporation). From an international perspective the PE aims to avoid double taxation by different countries.

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 19%. Any income exceeding this threshold is taxable at a rate of 25.8%.

Corporate residents

All resident Dutch companies need to pay CIT. Tax residency is determined based on the particular circumstances and facts. The effective management location is defined by certain prerequisites. This is the location where:

Thus entities are considered tax resident if their effective management locations are in Holland.

Eligible shareholding

According to the effective legislation, the PE is applicable to profits from shareholding of a Dutch resident parent company, if it fulfills the requirements listed below:

  1. The parent corporation participates with at least five percent of the nominal contributed share capital (alternatively, depending on the circumstances, five percent of the rights to vote) of a given company whose capital has been split into shares (requirement for minimum threshold);
  2. At least one of three conditions is fulfilled:
  1. The profits generated by the subsidiary are not deductible with respect to CIT in the subsidiary’s country.

Participation not eligible for exemption

In case the requirement for minimum threshold (at least five percent participation in the nominal contributed share capital) is fulfilled, but the other conditions for PE are not, the corporation will receive up to 5 percent credit for the base tax payable for the participation (with the exception of eligible EU participations, where the credit can cover the whole tax).

Motive requirement

The motive requirement involves circumstances and facts and is fulfilled when the parent company invests in its subsidiary with the aim to obtain profits exceeding the ones from passive portfolio investments. Generally, the requirement is met if, for example, the parent company is actively involved in the subsidiary’s management or if it performs a significant function in the group’s business enterprise. If >50 percent of the subsidiary’s consolidated assets are made up of shareholdings amounting to <5 percent, or the subsidiary (including its subsidiaries) functions predominantly as a leasing/licensing or group financing company, then the motive requirement will not be fulfilled.

Asset requirement 

Free passive assets, subject to a reduced tax rate, have the following characteristics:

Immovable property always qualifies as “good” for the purposes of this requirement (never mind its function in the enterprise and its taxation). The fair value of assets on the market is decisive for the fulfilment of the requirement’s conditions. The asset requirement is continuous and mostly needs to be fulfilled throughout the whole accounting year.

Assets used for leasing, licensing or group financing are considered passive, except when they are included in active leasing or financing enterprises, as defined by law, or their financing consists of ≥ 90% third party loans.

Taxation requirement

In general, participations are considered subject to adequate taxation if they are taxed as profits at a minimum rate of 10 percent. Certain differences in the tax bases, e.g. a broad PE, taxation deferral until profit distribution, deductible dividends or absence of limitations with respect to interest deduction may lead to the disqualification of profit tax as sufficient liability, except in cases where the effective rate of taxation in accordance with the Dutch standards is ≥ 10%.

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 19 – 25.8% usually levied (according to the rates for 2024).

Description of the IB regime

To be eligible for taxation under the IB regime, companies should have fixed intangible assets that meet certain requirements. According to the IB rules, qualifying assets are determined taking into account the taxpayer’s company size. Small taxpayers have a total 5-year group turnover below 250M Euro, while the total gross benefit derived from the eligible intangible assets for the 5-year period is below 37.5M Euro. Companies exceeding these thresholds are qualified as large taxpayers.

In these terms:

qualifying assets of small taxpayers are fixed intangible assets developed in-house and derived from Research and Development (R&D) activities benefitting from remittance reduction (WBSO – R&D tax credit / R&D certificate);

qualifying assets of large taxpayers (excluding cases of software or biological products for plant protection) must meet some additional conditions. Besides R&D certificates, the companies must also have an EU license for medicinal products,  a breeder’s right/(requested) patent, a certificate for additional protection or a certified utility model. Assets related to qualifying fixed intangible assets or exclusive licenses may also qualify under particular circumstances. Logos, brands and similar assets are not eligible for tax reduction.

If the eligibility conditions are fulfilled, then such profits are not taxed at the usual rate of corporate tax, i.e. 25.8%, but at a reduced rate of 7%. Therefore the actual tax amounts to 7%. Before applying the reduced tax rate, the expenses for the asset’s development need to be recaptured from the profits, which means that their amount will be taxed using the full general rate).

It is important to mention that R&D certificates allow both large and small taxpayers to apply for a tax credit with respect to wage tax liabilities. Since 2016 the basis for remittance reduction related to R&D consists of the costs for wage tax plus other R&D expenditures and costs.

Determination of the profits from technology and benefits of the IB regime

The profits eligible for reduced corporate income tax are determined by the expenses of the taxpayer related to the qualifying assets’ development. The expenditures for development are split in two categories: eligible and non-eligible, using the so-called nexus approach. Eligible expenditures are all direct costs related to the fixed intangible asset’s development, except any costs for outsourcing R&D tasks (costs incurred for outsourcing can reach a maximum of 30% of the eligible expenditures). Therefore, the formula below is applied:

eligible costs x 1.3

eligible profits = --------------------------------------------------   x profits

total costs

The profits are determined by tailoring. A simple functional analysis and transfer pricing can be used for a start.

Losses

The IB regime is structured so that it can also bring advantages to companies that aren’t currently paying taxes, e.g. due to accumulated tax losses in the past. In this case, if the company uses the IB regime, the full recapture of its accumulated losses from tax can take longer, so the period for which the entity is not liable for taxes will be extended.

If the developed assets in the field of technology lead to losses, the lost amounts can usually be deducted for the means of taxation at the usual 25.8% rate, and not the low effective 7% rate. Also, any initial losses that were incurred before the start of business operations can also be deducted at the general corporate tax rate of 25.8%. The reduced 7% rate is applicable again only after recapture of IB losses. A taxpayer can only have one IB. Therefore the amounts relevant to the intangible fixed assets under IB regime are consolidated.

Application submission and certainty for future taxes (Advance Tax Rulings, ATR)

A company can use the reduced corporate tax rate by selecting the relevant items in its yearly corporate tax return. In Holland, it is not only possible, but it is a standard procedure to go over the practical aspects of the IB principles and the question of profit allocation with the Tax and Customs Administration (Revenue Service). Taxpayers have the option to conclude binding agreements (ATRs) with the administration and, by doing so, have certainty with respect to future taxes. It is important to mention that the information on tax rulings is exchanged with international tax authorities. Read more on the Advance Tax Rulings in the Netherlands

If you need more details or legal support, please, get in touch with our Dutch tax agents.

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 period for foreign VAT reclamation may even be longer than a year and its duration depends on the EU member involved with the application for refund.

Negative influence of VAT on cash flows is also observed in the process of import of products in the European Union. Importers are obliged to pay VAT that can be reclaimed only retroactively, in the VAT return, or in a time-consuming process requiring a separate refund application. As a consequence, companies have to prepay the VAT on their imports with adverse effects on their cash flows. On this background, few member states of the EU have adopted schemes for deferral of VAT payments that would otherwise be due at the time of import.

Article 23 license

Companies established in Holland have the option to apply for the Article 23 VAT deferral license. This document makes it possible to postpone the import VAT payment until the submission of the periodical return. In the statement, the VAT can be included as payable, but at the same time, its amount is also deducted under input VAT. This means that businesses do not necessarily have to pre-finance VAT. Without Art. 23 license, the VAT due for import would become immediately payable at the country’s border. Its subsequent reclamation occurs either through the periodical return or through a lengthy process for refund requiring a special application. As mentioned above, the refund of this VAT may take months, even years, depending on the case. VAT deferral licenses are granted to companies registered in Holland and international businesses without local establishment that have assigned a Dutch fiscal representative (a tax service provider holding a general licence) for the purpose of VAT.

In most members of the EU, the VAT payable at import has to be transferred to the customs and tax administration at the time of importation or shortly after. Countries like Ireland, Germany, Italy, Great Britain, Spain and Sweden do not offer options for postponed accounting. In other countries, the payment of VAT can be deferred, but only in specific cases and under strict conditions. The only country that provides an option comparable to the Dutch deferral license is Belgium. There the transfer of due VAT can be postponed until the submission of the periodical VAT return.

The EU Directive on the common system of value added tax provides the option to grant an exemption from VAT on import goods destined for another member state straight after import. Import goods intended for storage or sale in the respective member state cannot be exempt from import VAT. However, there is a possibility to suspend the payment of VAT and duties due at the time of import for a particular time period.

When goods enter the territory of the EU, companies the option to store them in the so-called customs warehouses. Such warehousing is possible in all member states, although the formal procedure varies depending on the state. In this case, the payment of duties and VAT is deferred until the goods’ removal from the customs warehouse. Thus VAT and duty payments are temporarily suspended to the advantage of cash flow. At some point in time, these taxes become payable. On the other hand, if the goods’ next destination is unknown, their storage in a customs warehouse can be beneficial. For example, if the goods are subsequently shipped to third countries, no VAT and customs duties become due.

Why should you choose the Netherlands as your gateway to Europe

Considering the above, one can conclude that logistic and geographical factors are just some of the significant reasons to import goods through Holland. The option to avoid VAT pre-financing can be decisive for companies in planning the routes of their import goods.

There is also another factor that must not be overlooked: the level of responsiveness of the different customs and tax administrations across the European Union. Some adopt a strictly formal approach, while others welcome dialogue. The customs and tax administration in Holland is open to discussions. It is acknowledged for its high quality of service and proactive approach. The officers are also ready to confirm particular arrangements in written form, guaranteeing certainty (in advance) to taxable entities. The responsiveness of the Dutch administration is a valuable quality and a strong motivator, along with the favourable VAT arrangements at import, for businesses to choose Holland as a European gateway.

Are you interested? Our company has the network, local competencies, and experience to assist you in the efficient structuring of your import/export operations, both in Holland and abroad. We are here to consider your needs and meet them. If you would like to receive more information on the possibilities, please, do not hesitate to get in touch with us.

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 you would like to receive more detailed information, please contact us.

Mandatory preparation of financial statements

Practically all corporate entities registered in Holland are obliged to present financial statements. The requirement is statutory and often included in the entity’s Articles of Association (AoA).

Foreign companies are obliged to submit their yearly accounts in their home countries and provide a copy to the Dutch Commercial Chamber. Branches are an exception to this rule as they are not obliged to prepare separate financial statements.

Importance of the financial reports for Dutch businesses

Financial statements constitute the foundation of corporate governance and, as such, are a vital element of the legal system in Holland.

Their main purpose is to report to shareholders. Once the shareholders accept the statements, they discharge the directors’ board for its performance. Their equally important secondary purpose is to protect creditors. Practically all corporate entities are obliged to register at the Trade Registry of the Commercial Chamber and publish annually particular financial data. The Registry is publically accessible and represents an important information source with regard to the national market.

Financial statements also have to do with taxation. Even though the tax law provides independent rules for determining the tax basis, the first step of the process is to consider the statements.

Contents of Dutch financial statements

As a minimum, the statements contain a profit/loss account, balance sheet and notes on the accounts.

Generally Accepted Principles in Accounting (GAAP) in Holland

The Dutch rules for accounting are regulated. The accounting principles are primarily based on European directives.

The GAAP apply to private and public companies with limited liability and to other entities, e.g. some partnership forms. Companies listed on the stock market, insurance companies and financial institutions are subject to special rules.

The Dutch accounting principles differ from the international standards for financial reporting (IFRS) but they are continuously harmonized. As of 2005 all companies listed in the European Union are obliged to follow the IFRS. This rule also applies to the Dutch insurance companies and financial institutions. The question whether private limited liability companies (BVs), non-listed public limited liability companies (NVs) and other local business entities can follow the IFRS is still being discussed.

The Dutch accounting principles

According to the principles of accounting all financial information has to be understandable, reliable, relevant and comparable. All financial statements have to reflect realistically the position of the company in line with the principles.

The profit & loss account, balance sheet and notes must present truthfully and dependably the equity of the shareholders on the date of the balance sheet, the annual profit and, if at all possible, the liquidity and solvability of the company

Companies participating in international groups may choose to prepare their statements in compliance with accounting standards accepted in another member of the EU, if a reference to these standards is included in the attached notes.

The principles of accounting need to be presented in the statement. Once implemented, these principles can be changed only if the change is well justified. The reason for the change must be explained in the respective notes, together with its consequences with respect to the company’s financial position. The Dutch legislation lays out specific requirements for disclosure and valuation that must be respected.

The official reporting currency is the Euro, but depending on the specific company activities or its group structure, the report may involve another currency.

Consolidation, audit and publication requirements in Holland

The consolidation, audit and publication requirements depend on company size: large, medium, small or micro. The size is determined using the criteria below:

The following table summarizes the parameters used for classification. The asset values, staff and net turnover of group companies and subsidiaries qualifying for consolidation must also be included. Companies qualifying for the large or medium category must meet at least 2 of the 3 criteria in two consecutive years.

Criterion Large Medium Small Micro
Turnover > 20 M Euro 6 – 20 M Euro 350 K – 6 M Euro < 350 K Euro
Assets > 40 M Euro 12 – 40 M Euro 700 K – 12 M Euro < 700 K Euro
Employees > 250 50 - 250 10 – 50 < 10

Dutch requirements for consolidation

In principle, corporations must include the data of any subsidiaries and companies in their group in their financial statements in order to present a consolidated report.

According to the law in Holland controlled subsidiaries are legal entities in which companies can exercise indirectly or directly >50 percent of the rights to vote at the meeting of shareholders or are authorised to dismiss or appoint >50 percent of the supervisory and managing directors. Partnerships where companies are full partners also fall within the scope of the subsidiary definition. Group companies are legal entities or partnerships in the structure of company groups. The decisive consolidation factor is the control (managerial) over the subsidiaries, regardless of the percentage of held shares.

The financial information of subsidiaries or group companies does not need to be presented in the financial statements (consolidated) if:

1. It is insignificant compared to the whole group:

2. Consolidation can be excluded if the group company or subsidiary:

3. Consolidation can also be excluded under the following circumstances:

Requirements for audit in Holland

The law in Holland requires that large and medium companies have their yearly reports audited by qualified, registered and independent local auditors. Auditors are appointed by shareholders, members of the general meeting, or, alternatively by the managing or supervisory board. In principle, audit reports should include points clarifying whether:

The appointed auditor reports to the supervisory and managing boards. The competent institution should first consider the audit report and then approve or determine the financial statements.

If it is not mandatory to carry out an audit, the parties may do so voluntarily.

The Dutch publication requirements

All financial statements should be finalized and accepted by the members of the managing board within 5 months following the financial year’s end. After that the shareholders have two months to adopt the statements after their approval by the management directors. Also, the company has to publish its yearly report within 8 days of the shareholders’ approval or determination of the statements.  Publication means submission of a copy at the Trade Registry, Commercial Chamber.

The period for preparation of the statements can be extended by up to five months by the shareholders. Therefore the publication deadline is 12 month following the financial year’s end.

If the entity’s shareholders also act in the capacity of managing directors, then the date of approval of the documents by the Management Board would also be the date of adoption by the meeting of shareholders. Under such circumstances, the publication deadline is five months (or ten months, if an extension of five months has been given) following the financial year’s end.

The requirements for publication depend on the company size. They are summarized in the table below.

Document Large Medium Small Micro
Balance sheet, notes Fully disclosed Condensed Condensed Limited
Profit & loss accounts, notes Fully disclosed Condensed Not necessary Not necessary
Valuation principles, notes Fully disclosed Fully disclosed Fully disclosed Not necessary
Management report Fully disclosed Fully disclosed Not necessary Not necessary
Statements on cash flow Fully disclosed Fully disclosed Not necessary Not necessary

Can we help you?

We can offer you a full list of services for accounting, including the preparation of financial statements/yearly reports, administration, tax compliance and payroll services.

Please, contact us with any questions related to this article or in case you want us to send you a specific proposal for engagement.

In the Netherlands, you have the option to discuss the tax position of your company with the Tax Administration and reach together an agreement regarding the consequences tax-wise. This agreement is binding for the taxpayer and the authorities. It needs to reflect the qualification and interpretation of facts and to conform to the national tax legislation, i.e. it should not contradict it. As of 2004 the policy on rulings is split in two general parts: for advance pricing agreements (APA) and advance tax rulings (ATR), respectively.

Advanced pricing agreements (APA) in the Netherlands

APAs cover the aspects of the arm’s length principle of remuneration and the methodology for transfer pricing. APAs are based on transfer pricing studies. The national tax authorities agree with the taxpayer that the income used for corporate taxation will be determined by such a study.

Advance tax rulings (ATR) in the Netherlands

ATRs cover the tax treatment related to specific circumstances and facts. Usually, ATRs are related to:

When signing an ATR you should carefully go over and confirm the circumstances and facts forming the base of this agreement. If the circumstances and facts change it may be useful to check whether and to what degree the concluded ATR will continue to serve its purpose. Our extensive experience in ATR- and APA-related negotiations guarantees that our clients always get reliable agreements minimizing the probability of surprises.

Holland has signed numerous treaties for the avoidance of double taxation. These bilateral pacts ensure tax relief by avoiding double taxation with respect to income of individuals derived from both a source in Holland and another country.

The Netherlands has signed close to 100 double tax avoidance treaties. Investors planning to establish local businesses should obtain information regarding the advantages offered by these treaties, in case they are applicable to their home countries. For example, Holland has signed such treaties with the United States, the United Kingdom and the Arab Emirates.

Our Dutch specialists in accounting can provide you with details regarding the treaties for the avoidance of double tax concluded with your home country or any other countries you may be interested in.

Double tax avoidance treaties

The treaties for double tax avoidance determine which countries may levy taxes with respect to income generated under Dutch jurisdiction. Persons living outside Holland but deriving income from Dutch sources are taxed just once on capital and income, in accordance with the provision of these treaties.

Thus persons deriving income from Holland but living abroad pay less tax on income in Holland. Our local tax specialists can provide you with more details on the taxes that foreign residents must pay in Holland, including the thirty percent reimbursement ruling for international employees.

You may also benefit from the participation exemption rule to avoid paying tax on dividends.

The significance of the double tax treaties for international investors in the Netherlands

The treaties for avoidance of double taxation are beneficial for both individuals and companies opening branches in Holland. These bilateral conventions provide for reduced rates of withholding taxes for royalties and dividends agreed between the countries.

Companies and individuals residing in countries that have not yet concluded agreements for double tax avoidance with Holland can still take advantage of the Double Taxation Decree that, to a certain extent, reduces the tax burden.

If you need further information on the Dutch taxation system or professional audit and accounting services in Holland, please, get in touch with our tax specialists.

See also the tax office website about the Double Tax Treaties.

In the Netherlands, local companies and branches are subject to the same general taxation regime in accordance to the national law. Still, there are particular differences as branches are not obliged to cover certain taxes required for other business entities. In case you own a Dutch branch our local administrators can check which tax liabilities are applicable in your situation.

Dutch tax regime for branches

The tax regulations in Holland provide for equal taxation of branches and companies with respect to the rates for generated profits. Therefore, if you own a foreign company and decide to establish a Dutch branch, the tax you will need to transfer will be 19% for profit under EUR 200 000 and 25.8% for the amount exceeding this threshold in 2024.

The national government provides incentives for international investors opening branches in Holland. They are not subject to withholding tax, while resident companies pay 15% withholding tax. It is also possible to have clarity on the matter and receive an advanced tax ruling from the authorities.

Our Dutch financial administrators can give you more information about taxation of branches in the Netherlands. Please, do not hesitate to contact them with any questions on this subject.

Branch tax obligations in the Netherlands

In contrast to representative offices, branches allow international investors to perform business operations in Holland. Therefore, branches have to be registered at the Commercial Chamber and the Tax Office. They are not subject to tax for capital registration, even if they receive contributions to their capital.

In Holland, the value added tax and wage tax rates for branches are identical to those applying to local companies. The amounts vary with respect to the scope and volume of the commercial activities. The hiring of employees and their actual number may be associated with specific tax liabilities.

Do you have questions regarding the tax regulations applicable to your company’s Dutch branch or the amount of employee taxes that you will need to cover? Please, do not hesitate to get in touch with our Dutch bookkeeping specialists.

Import of products to the Netherlands

The import of products originating in non-EU countries to Holland is generally taxable for VAT purposes, regardless of whether the import is performed by a private, taxable, non-taxable or exempt entity. Therefore VAT is usually due at import and is normally transferred to the Dutch Customs. In case you are interested in starting an import/export business in the Netherlands contact our local incorporation agents, who will guide you in the process.

License for VAT deferment

Holland has adopted a special system in connection to Art. 23, Act on VAT, resulting in the issue of Article 23 licenses. These licenses enable importers to postpone the VAT payment, rather than transfer the amount upon import. The system shifts the VAT liabilities to the recurrent VAT returns. Therefore the import VAT is declared in the respective periodic return but may be deducted as well in case no full deduction of VAT is applied. So VAT is not actually paid on import, which brings interest and cash-flow advantages. The license for VAT deferment is only issued to taxable, non-taxable and exempt entities (not issued to natural persons).

Requirements for VAT deferment license

Generally, the following requirements must be fulfilled in order to apply for a VAT deferment license:

The importation of delivery trucks and private cars is subject to different conditions.

Application for VAT deferment license

Below is a non-exhaustive list of the information that must be included in the VAT deferment application:

The tax authorities in Holland must process the application in an 8-week period.

Frequently asked questions

Our agency can quickly make the necessary arrangements for issue of Article 23 license for VAT deferment. Contact us for more information or read here for more on the advantages of the Dutch tax system.

The Dutch credit system can be broadly defined as the relationships between persons (legal or natural) who provide loans and persons who take them. Therefore the system operates with credits provided by both non-banking and banking institutions for use by legal or natural persons.

Parties involved in credit transactions

Credit transactions take place between a lender (the person providing the credit) and a debtor (the person benefitting from the credit). Usually, the credit is a monetary amount that needs to be repaid in a particular period of time, including interest, i.e. the benefit (gain) that the creditor receives for lending money to the debtor using the loan. Creditors have claim rights to the loans and can demand their return, including interest, according to the provisions of their agreements with the debtors. The debtor carries the obligation to pay back the loan and interest within a certain time period specified in the agreement.

Loan types in the Netherlands

A PL (personal loan) is a type of credit in the Dutch credit system where the amount, interest rate and term of the loan are specified in an agreement between a bank institution and a debtor. Therefore personal loans have fixed monthly payments consisting of principal and interest.

Dutch revolving credits have a limit indicating the maximum possible amount available as a loan to the debtor. The interest and principal are transferred monthly. In most cases, they are calculated as a fixed percentage with respect to the limit.

Dutch real estate owners can use property tax credits based on the appreciation of goods. Property values (WOZ values) determined by municipalities establish the amounts that may be loaned in property tax credits. Such credits are usually characterised by sharp interest rate increases.

Business loans for financing are concluded between Dutch bank institutions and legal persons. Postbank, Rabobank, ING and ABN AMRO are the most popular banks offering such loans. Business loans are usually concluded by a limited business entity such as the BV company. In such cases, the company is liable for repayment of the loan, not the director of the BV. Read more on directors' liability.

Supplier credits are the most commonly used credits for the purposes of financing businesses. Suppliers provide credits as payments for months or years. These credits have the benefit of not compromising the companies’ liquidity.

In subordinated loans creditors are subordinated in case of debtor bankruptcy, i.e. they are last in the priority order. Such subordination needs to be agreed in a contract.

Credit contracts

The Dutch credit registration agency (BKR) is a significant institution in the framework of the national credit system. It keeps important information with respect to all debtors, creditors and credits in the country through the Credit Registration Database (CKI).

BKR receives all details provided in credit contracts: credit amount, date of conclusion, planned month for full repayment, actual month of full repayment, credit type, details on repayment, the debtor’s personal information (name, birth date, residence, address, personal ID details) and the credit institution’s details.

If you would like to know more about the Dutch credit system, the available loan types and the criteria for eligibility, please, call our business consultants.

The service sector is the most advanced in Holland’s economy and accounts for over two-thirds of the Gross Domestic Product. The sector includes transport, insurance and banking. Four banks established in the country are ranked in the global top 60: Fortis, Rabobank, ING and ABN AMRO. They have a network comprising roughly 6500 branches in Holland and 500 more in 50 other countries. Meanwhile, more than sixty branches and subsidiaries of European, Asian and American banks operate in the country.

De Nederlandsche Bank

The history of the Dutch banking system dates from 1814, when DNB (De Nederlandsche Bank) – the first publically owned bank that offered non-convertible low-value currency – was established. Therefore it is considered as the central bank of the country and was included in the European Central Bank System (ESCB) in 1999.

DNB, part of ESCB, is an administrative body with independent management. Routine operations are supervised by its management board. DNB also has a Board of Supervisors of the Crown. It is appointed as recommended by the collective meeting of the boards of executives and supervisors. DNB’s shareholder meetings and the respective minutes are kept secret.

As of October 30, 2004, the Nederlandsche Bank and the Pensions and Insurance Supervisory Authority (called Insurance Board since 2001) have merged. Therefore the bank carries the huge responsibility of monitoring the abovementioned institutions, additionally to its traditional supervision of banking. Pension funds or insurance companies cannot be established without DNB’s approval. The bank grants its permission only in case the life insurance company or pension fund is managed by specialists and has adequate financial resources.

Types of Dutch banks

The Dutch banking system comprises the following institutions: saving banks, commercial banks, mortgage banks and credit unions.

ABN AMRO (including RBS, BSCH and Fortis) and ING are the most significant Dutch banks.

The Dutch banking system also contains a bank providing specialized services and products to individuals (POSTBANK) by working with the national post office. It handles more than seven million accounts.

Rabobank is a network of credit unions. Rabobank Nederland owns fist position in this network. The Dutch banking system includes numerous credit institutions (about 302 in total) along with CEB N.V.

Bunq is a relatively new Dutch internet bank which has its focus on individuals. This bank offers banking services for non-residents.

The Dutch banking system is quite concentrated and included in the global top five with an 86.8 percent total assets share.

Banking sector efficiency is assessed by the proportions of total bank assets and administrative expenses. Using this criterion, the Dutch system is deemed effective, based on the scoring for the past several years. Economic profitability (ROA) is also used as a performance measure. It depends on the proportions of aggregate bank assets and net profit.

If you need more details regarding the Dutch banking system or if you need assistance to open a Dutch bank account, please, call our local business consultants. They will provide more information and customized assistance.

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