The Netherlands remains a popular destination for multinationals
The Netherlands is the second most popular destination for large London listed multinationals to set up a subsidiary. Only the US state of Delaware surpasses the Netherlands in terms of registered subsidiaries of multinationals.
Fiscal climate
The Dutch newspaper de Volkskrant wrote an article about the popularity of the Netherlands as a place to register a subsidiary.
The fiscal climate in the Netherlands is the main reason many companies register a subsidiary and why the Netherlands is sometimes called a tax haven.
Tax advantages
The Netherlands has a very competitive fiscal climate. Companies established in the Netherlands benefit from various tax advantages, including:
1) Competitive 20% corporate income tax rate over the first 200,000 euros of taxable profit and 25.5% on the excess over that amount.
2) The Dutch ruling practice, as a result of which certainty in advance can be obtained on future transactions, investments or corporate structures.
3) Horizontal supervision: the Dutch tax authority is the first in the world to make prior arrangements with large and medium-sized taxable businesses on the tax liabilities expected in the course of the year, and how they are going to manage them. 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 which leads 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.
Related topics
Fiscal advantages of setting up shop in the Amsterdam Area
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