Tax compliance in the Netherlands
ABiLiTieS Trust offers the service of (assistance with) preparation and filing of:
> Corporate income tax
> Value added tax
> Dividend withholding tax
> Wage tax returns.
We also have good contacts with experienced tax advisors with an international practise for any type of transaction or restructuring.
Contact us to discuss your tax situation or get a fee quote.
Tax substance
For companies it is often key that there is actual presence (tax substance) in the Netherlands as this enables them to apply the Dutch tax treaties, create fiscal unities and conclude Dutch advance tax rulings and advance pricing agreements. ABiLiTieS Trust offers registered address, directorship and executes bookkeeping in the Netherlands so that your company will meet the Dutch minimal substance requirements.
30% ruling
For expats it can be beneficial if they qualify for a 30% ruling. A scheme set up as a compensation for the additional cost of moving over and living abroad. It will exclude the top 30% of the salary from taxation for personal income tax. Also it will enable to exclude foreign sources of income from taxation and to convert a foreign passport into a Dutch.
What taxes apply to a Dutch company?
> Corporate income tax
There are two rates used for calculation of the tax on the profits of Dutch companies: a 19% (2023 and onwards) for the profits up to €200,000 (2023) and 25% rate for any profit above. In the near future, there will be an extension of the first bracket that is specifically attractive for small and medium sized businesses.
Any Dutch company will have to file its annual corporate income tax return on an annual basis also in case there is no income or a negative income. The deadline for filing of the corporate income tax return is five months after closing of the financial year. The filing deadline can easily be extended for a period of five months or longer.
> Value added tax (VAT)
Value added tax returns will have to be filed by a Dutch company in case of the sale of goods and services. In case of the sale of good or services within the EU and outside the Netherlands the filing of a intra-community supply report will be required.
The frequency of the filings will be determined by the Dutch tax authorities on the basis of the (estimated) activity of the company. It can be monthly, quaterly or yearly. The deadline for filing of the value added tax returns is one month after closing of the tax period in case of monthly or quarterly reporting. In case of yearly reporting, the deadline is three months.
Check if a VAT number of any company in the EU is valid at the VIES site of the European Commission.
> Dividend withholding tax
Dividend withholding tax could be applicable in case of dividend distribution by the Dutch company to its shareholders. Dividend withholding tax filings have to be made within a month after distribution or the corporate approval of the dividend withholding tax. In case of a dividend withholding tax exemption, a notification of the exempted distribution shall be filed with the Dutch tax authorities.
> Wage tax
Wage tax retuns will have to be filed by a Dutch company in case of payment of salary. Such salary can also be made in the form of bonuses or payment in kind. The standard frequency for wage tax filing is monthly. Wage tax filings have to be made within a month after closing of the tax period.
File your taxes on time and save money
You probably know that you can get penalties for late filing of tax returns. If your Dutch business is profitable, there is another reason to file timely.
The tax interest for corporate income tax is 8%. A timely provisional assessment can therefore be a money saver.
Note that if your business has a tax receivable no interest will be granted. The Dutch tax authorities stopped paying interest on overpaid tax several years ago.
The Tax Authorities calculate tax interest from 1 July after closing of the tax year, if the calendar year is applied. Tax interest will therefore be charged from 1 July 2023 for the 2022 tax year.
Interest is also charged over the payment term of 6 weeks. If your company has a split financial year, interest will be charged from the seventh month after the end of the financial year.
Tax interest rates on other taxes
The 8% tax interest rate also applies for withholding tax on interest and royalties. For all other taxes, the tax interest is currently 4%.
So the tax interest that is calculated, for example for your outstanding Dutch personal income tax assessment, is 4%. It is charged from the seventh month after the end of the year.
What can you do to limit the interest charges?
You can prevent the high tax interest by timely filing a provisional return that approximates the tax to be paid accurately. Alternatively you can file your corporate income tax return ealy.
The tax authorities indicate that if you file the provisional return for the 2022 calendar year before 1 May 2023, or submit the corporate income tax return 2022 before 1 June 2023, they will not charge tax interest.
Do you receive a provisional assessment from the tax authorities and believe that you are requested to pay too much? In that case, too, it is advisable to apply for a refund via an adjusted provisional tax return. This way your money stays on your bank account.
Do you need a VAT number for import into the EU?
Once your company has a Dutch VAT number it can request an EORI number and import into the EU. Before the Brexit, many businesses imported their goods from all over the world via the UK. Including the goods that were ending up with non-UK clients.
Since the beginning of 2021, these UK based companies have to import their products for a second time to be able to services any customers based in the European Union. This can be a burdensome task. In particular if your business sells hundreds of different products.
More and more British based companies therefore decide to start a second business hub in the Netherlands. The Netherlands is a country that excellently facilitates the import of goods. You do not need much more than to set up a company in the Netherlands, a warehouse and a registered address.
This will provide your business with a Dutch VAT number which ensures an easy access to the EU. Import into the EU via the Netherlands is even more attractive as the ‘article 23 status’ can defer Dutch VAT from the moment of passing the customs to the moment of the VAT filing.
Contact us now to request a VAT number.
Can you lower a Dutch corporate income tax penalty?
The corporate income tax penalties for late filing in the Netherlands are very high. It can be very beneficial to study if there are any grounds for objection on the height of the penalty.
Grounds can be amongst others 'first penalty' and 'small sized company'. For starting business the chances are substantial that your objection will be accepted and reduced to €500.
Contact us to check if we can assist you with filing an objection against your business' corporate income tax penalties.
What Dutch taxes apply when a Dutch company distributes dividends?
At distribution of dividends, the taxation under the Dividend Withholding Tax Act is relevant. In case of distribution of dividends to natural persons a dividend withholding tax rate of 15% applies. In principal the rate of 15% also applies to distributions to legal persons, though there are several exemptions.
At qualifying distributions of dividends to legal persons within the European Union an exemption for dividend withholding tax applies. In case of an exempted distribution a completed notification form shall be sent to the Dutch tax authorities.
At qualifying distributions to legal persons outside the European Union there can also be an exemption from Dutch dividend withholding tax. To qualify for the exemption, the legal person will need to meet, amongst others, Dutch minimum tax substance regulations and there shall be a possibility for exchange of information between the Netherlands and the recipient country.
Further note that there are tax treaties whereby the recipient of dividends can credit any dividend withholding tax paid in the Netherlands in its corporate income tax filing.
There is more and more a focus if the recipient qualifies as the beneficial owner with a real nexus with the country of residence. If there is no such nexus, anti-abuse provisions can apply.
A repayment of capital in the form of share capital or share premium can under certain conditions also qualify as dividend distribution. In case of a distribution, it is advised to have guidance from a tax advisor.
Taxation of Crypto Currency in the Netherlands
Do you wish to know more on crypto taxation in the Netherlands? It can be very interesting to hold your crypro assets such as security tokens, utility tokens and non-fungible tokens via a Dutch holding company or collective investment fund. We cooperate with specialised tax consultants to set up and maintain structures for holding crypto assets or mining crypto currency.
Useful links:
Dutch Tax authorities with practical information on corporate income tax, personal income tax, VAT, etc.
OECD with information on tax policies and with an overview of tax reforms
Dutch Government with an overview of Dutch tax treaties