Tax and Administration  

In the context of transparency and clarity, the Dutch Tax and Customs Administration states its tax position and expectation to make sure that all parties are aware and kept updated on an annual basis. The Netherlands aims to create and maintain an attractive pro-business climate for local as well as foreign companies that are active in different sectors and industries. The Dutch government pursues strategies and implements policies to encourage the creation of new businesses, expansion of  existing companies and welcoming foreign enterprises that will contribute to the stimulation of sustainable economic growth. These tax schemes, strategies and policies exist and take place in different shapes and forms such as compensations, exemptions and deductions to enhance a competitive fiscal climate.  

• Tax Treaties

A tax treaty is a double tax agreement reached between two countries that states whether the home country or host country has the right to impose tax on a certain income once. Otherwise, the employer and the employee will be taxed twice at the same time. The Dutch government wants to prevent and avoid this situation of double taxation and create a tax relief. Therefore, the Dutch government has created and developed a wide tax treaty network and concluded tax treaties with a large number of countries. 

• Competitive Tax Rates

The Netherlands has a competitive fiscal climate with respect of other countries in the world. The Dutch Tax and Customs Administration offers a favourable and competitive corporate tax rates in Europe. The current corporate tax rates are stated in the following way below:

• the rate is 19% up to € 200,000
• the rate 25.8% on taxable profits above € 200,000.  

• Tax Advantages  

The Dutch Tax and Customs Administration also offers tax advantages to foreign employees in the Netherlands. This beneficial tax scheme is called the 30% ruling or 30% facility and applicable to highly skilled migrants. In other words, an expat tax break. This right serves as a reimbursement with the purpose of  compensation for the extra costs that highly skilled migrants can incur when moving to the Netherlands. The rates are indicated in the following way below:

• 30% tax break of the income for the first 20 months;
• 20% tax break of the income for the second 20 months;
• 10% tax break of the income for the third 20 months.

• Tax Refund

In almost all situations businesses must calculate and take into account VAT (turnover tax, btw) on the sales price of the products and services provided to its customers. The VAT you have received from the customers has to be paid to the Dutch Tax and Customs Administration (Belastingdienst). This also applies the moment a business purchase a product or service from its supplier whereby the VAT is included in the sales price. However, this time the business can file the VAT return whereby the VAT will be paid back to the business. The Dutch Tax and Customs Administration will inform when the VAT return must be filed and when to make the VAT payment. Based on the situation this can be each month, each quarter, or each year. Usually, this takes place once every quarter.

The fiscal climate of the Netherlands offers support and opportunities in the form of tax schemes and attractive incentive programs that are available for small-midsize enterprises as well as large corporations to stimulate innovation and generate sustainable business growth. It is important to be aware and optimally benefit of the fiscal rights and tax facilities provided by the Dutch Tax and Customs Administration to grow your business. Feel free to get in touch with us and let’s go for it.