Establishing Dutch business operations

The Netherlands is one of the most competitive economies in the world and has a leading role in digitalisation, innovation and sustainability. Moreover, the Netherlands has an excellent infrastructure with a world-class airport, top-ranked seaports, public transport services, high-speed roads, and broadband networks, making the Netherlands top ranked in the World Economic Forum’s Global Competitiveness Index.

Doing business in the Netherlands

Apart from the excellent infrastructure, the fact that around 90% of the Dutch speak English and many people are multilingual, makes that the Netherlands is seen as the “Gateway to Europe”. The Netherlands offers a very good business climate for an optimal European supply chain.

Besides these unique selling points, the Dutch government has created a competitive tax regime that stimulates entrepreneurship and foreign investment in the Netherlands. A combination of rather low corporate income tax rates compared to most other (EU) countries, various attractive financial incentives, a far-reaching network of nearly 100 bilateral tax treaties, the absence of withholding tax on interest and royalties (except for abuse situations), the participation exemption and the possibility to conclude so-called advance tax rulings, makes the country a reliable choice as a base for international operations. In addition, expatriates who are temporarily assigned to the Netherlands may benefit from a special tax regime, known as the “30% ruling”. That is the reason that the Netherlands is a preferred location to establish European headquarters or sales and distribution activities.

A few of the main advantages of the Dutch tax system

  • A far reaching tax treaty network to avoid double taxation and providing a substantial reduction of withholding taxes on dividends, interests and royalties, often even to zero.
  • No capital tax levy on capital contributions to a company, either in cash or in kind.
  • Participation exemption regime: all benefits related to a qualifying shareholding ((cash) dividends, capital gains and liquidation proceeds) are exempt from Dutch corporate income tax.
  • Object exemption regime: profits derived from active permanent establishments (branches) are exempt from Dutch corporate income tax.
  • Fiscal unity regime: Tax consolidation of group companies whereby the parent company files a tax return on a consolidated basis. The fiscal unity regime allows the offset of losses of one company against profits of another company in a particular year. Moreover, the tax-free transfer of assets and liabilities between the fiscal companies facilitates reorganisations.
  • Innovation Box regime: the possibility to be effectively taxed at a reduced rate of 9% with respect to income from (patented) self-developed intangible assets/intellectual property (IP) for which an R&D-declaration (in Dutch: WBSO-verklaring) has been obtained.

Doing business in the Netherlands

To download our full brochure on establishing your business in the Netherlands in PDF, please click here. In this brochure you will find all the main advantages of the Dutch tax system explained in detail.

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