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Business Taxation for Expats in the Netherlands

Submitted: July 2014

The authority responsible for Dutch tax is the Belastingdienst. The website for the Belastingdienst is here.

 

Registration

For expats, a common form of business structure in the Netherlands is the besloten vennootschap (BV), which is essentially the same as a private limited liability company. An LTDA offers the advantages of:

There is also the sole proprietorship which is unincorporated, so it is not separated from its owner. The owner is fully liable for all business liabilities, and is subject to individual income tax on the income and loss from the business activities.

Your BV company must be registered in the Dutch Trade Register, which is administered by the Chamber of Commerce. Generally registration must take place between one week before and one week after business activity commences. Once proof of identity and a completed registration form (which may require the services of a civil-law notary) have been submitted, you will be given your unique registration number. This number must be used on all company correspondence. You will also have to register with the Belastingdienst; the necessary form is available on their website.

 

Corporate Income Tax

The Dutch tax year for companies runs from 1 January to 31 December. Dutch resident companies are liable for corporate income tax on their worldwide income.

The corporate income tax rate is 20% for taxable income up to €200,000 per year; income above €200,000 is taxed at 25%.

Companies must also pay social security insurance premiums on wages and salaries at rates varying according to the type of insurance from 0.15% to 7.05% up to a maximum contribution of €51,414 a year. For 2014, companies must pay a crisis tax of 16% on employee salary in excess of €150,000 (including bonuses).

Capital gains and interest are generally treated as ordinary income and taxed as such.

Losses can be carried forward for nine years; they can also be carried back for one year.  

Companies must file their Dutch corporate income tax returns electronically within five months of the end of the tax year, though it is possible to apply for an extension. Companies may be issued with provisional assessments during the year; these are based on a percentage of the company’s average profits for the last two financial years, and the estimated profit for the current financial period. The provisional assessment is generally payable within two months. It is possible to appeal against a provisional assessment, but this must be done within six weeks of the receipt of the assessment. A final assessment is produced after the tax return has been filed. The final figure will take into account any provisional payments that have been made. Taxpayers can receive a discount on their total tax bill if they agree to pay tax in regular installments over the course of the year.

 

 




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