Tax System For Progress And Expansion
As an open economy, the Netherlands has always given priority to a transparent and stable tax system, flexible enough to anticipate the rapidly changing requirements of international economic flows. Moreover, tax agreements have been made with most of the world’s trading nations, which guarantee univocal treatment.
Tax advantages
Companies established in the Netherlands profit from various tax advantages, including:
1) Competitive corporate tax rate of 25.5% well below the EU-average.
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 Patent Box: an effective tax rate of 10% for income related to a patent obtained in respect of selfdeveloped intangible assets (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.
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