Taxes in Netherlands
The Kingdom of the Netherlands is one of the most stable and economically developed countries in Europe. The Dutch fiscal system is in line with the general trends in EU tax policy, but at the same time retains certain local characteristics. The Netherlands includes some islands, but they have their tax regime, which is in line with the general principles of the Kingdom.
What are the taxes
The subject of tax law in the Netherlands is all entrepreneurs, corporate companies, and individuals, regardless of what type of activity the company conducts. While corporate organizations pay corporate tax, individuals and entrepreneurs are subject to income tax. However, this is far from the only type that taxation in the Netherlands uses. Depending on the type of activity and form of ownership, dividend tax, payroll tax, income tax, etc. are imposed. The tax rate also varies.
Tax rates
Tax | Tax Rate |
---|---|
VAT | 21% |
Corporate income tax | 19% – 25.8% |
Personal income tax | 9.28% – 49.5% |
Dividend tax | 15% |
Capital Gains tax | Box 1: 36.97% – 49.50%; Box 2: 24.50% – 33.00%; Box 3: 32%; |
Property tax | Varies by municipality |
Inheritance tax | 10% to 40% |
International tax | 0% – 49.5% (Varies by tax type) |
Cryptocurrency tax | Box 1: 36.97% – 49.50%; Box 2: 24.50% – 33.00%; Box 3: 32%; |
Request bookkeeping solution
If you have a company in Holland, it is mandatory to do accounting and complete all taxation rules according to the Netherlands laws.
Tax system
Residents are taxed on “worldwide” income, non-residents are taxed on income earned in the Netherlands.
No capital gains tax arises on the transfer of shares in the holding company if the exemption requirements are met.
Small-capitalization rule:
Following the POC, interest payments, the amount of which exceeds the company’s equity capital by 3 times, cannot be expensed.
Controlled foreign companies: There is no specific legislation on controlled foreign companies.
Transfer of losses:
The taxpayer has the right to carry forward the loss for the future within 9 years following the current tax period. Carry-over of losses is allowed for 1 year preceding the current tax period. Expenses incurred, for example, in 2009 and incurred in 2011 can, on request, be charged to the previous three-year period.
Special restrictions are set for the carry forward of losses by holding or financial companies.
Direct tax
Direct tax is one that is assessed on an individual (legal or natural) or property (i.e. real and personal property, livestock, crops, salaries, etc.) as distinct from the transaction tax.
Indirect tax
An indirect tax is a tax imposed by an agent (such as a retail store) on a person who carries the ultimate economic tax burden (such as the consumer). Subsequently, the intermediary issues a tax return and returns the tax proceeds to the nation.
Fees
In any of the aforementioned groups, net income is calculated on all total earnings earned over the fiscal year and decreased by revenue-related expenditures for the same time. Losses from one of the seven types of basic income (except capital investment) should be entirely compensated against positive income from another category of income (exceptions which apply to other income').
Business in Netherlands
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Disclaimer
Tax laws and regulations are frequently updated and can differ depending on personal circumstances. The information shared here is intended for general guidance and may not capture the latest changes. It is strongly advised to seek the assistance of a qualified tax professional for tailored and current advice relevant to your particular situation.