Majority of multinationals have Dutch offices
Ranging from AXA to Wall-Mart, a large majority of multinational companies have established Netherlands based financial offices. According to the Dutch newspaper Financiele Dablad, 80 of the world’s 100 biggest multinationals have a Dutch office; predominately special holdings and finance companies.
Competitive fiscal climate
The reason why so many internationally operating firms establish a branch here is often due to the attractive fiscal climate. Companies operating in the Netherlands benefit from various tax advantages, including:
1) A competitive 20% corporate income tax rate over the first 200,000 euros of taxable profit, and 25.5% on figures over that amount.
2) The Dutch ruling practice; which offers certainty in advance on future transactions, investments and corporate structures.
3) Horizontal supervision: the Dutch tax authority was the first in the world to make prior arrangements with large and medium-sized taxable businesses on tax liabilities expected in the course of the year, and how they are going to be managed. When the resulting ‘Tax Framework’ satisfies the requirements of the inspector, then in principle no more fiscal controls are needed for the year in question.
4) Participation exemption, meaning that all benefits relating to a qualifying shareholding (including cash dividends, dividends-in-kind, bonus shares, hidden profit distributions and capital gains), are exempt from Dutch corporate income tax.
5) Double taxation relief via the Royal Decree for the Avoidance of Double Taxation.
6) The Innovation Box: profit resulting from Research & Development leading to patents will only be taxed against an effective tax rate of 5%, rather than the statutory rate of 25.5% (certain conditions apply).
7) Absence of withholding tax on outgoing interest and royalty payments.
8) No capital-tax levy on the contribution of capital to a company and any later expansion of share capital.
9) The 30% ruling for expats: tax-free reimbursement of 30% of an employee’s salary provided that the employee has been recruited or assigned from abroad and has specific expertise which is scarce in the present Dutch labour market.
10) Wage tax credit on qualifying wages relating to technical innovation. Provided certain conditions are met, it is possible to obtain the wage tax credit when the Research & Development activities lead to the development of an intangible asset.
Amsterdam Area
Within the Netherlands, the Amsterdam Metropolitan Area is the main financial hub. The area is home to all major financial institutions such as Europe’s largest cross-border exchange, the Euronext and an abundance of professional service providers.
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