It is fair to say that The Netherlands are still a good choice for foreign investments looking at the tax advantages in Holland. In this blog we mention certain tax advantages when you want to set up a Dutch company.
Tax advantages Holland
In this blog we take a look at the following tax advantages in Holland:
- The 30% ruling
- Exemption from taxation
- Fiscal Unity
The 30% ruling
The 30% ruling is a tax advantage for highly skilled migrants in the Netherlands. It means that the taxable amount of a gross Dutch salary is reduced to 70%, meaning 30% of the wage is tax free. This tax benefit, which is also known as the “30% reimbursement ruling” or “30% facility”, is applicable to expat employees working in the Netherlands who meet the requirements. Do you want to know more about these requirements? Please contact us!
Holland also offers access to the Dutch Bilateral Investment Treaty (BITs) network, which includes a certain number of jurisdictions. BITs can be used to make sure that investors in certain jurisdictions receive the same treatment afforded to domestic investors or investors from third states. Next to that, BITs can provide protection from expropriation. Under most Dutch BITs, using a Dutch company in the corporate structure may shield against any foreign governmental interference, with dispute settlement clauses that mandate international arbitration, rather than having to go through the domestic court system.
Exemption from taxation
The Dutch participation exemption is a major attractor of companies. This facility allows the receipt of dividends and capital gains from subsidiaries. Free of tax. This has made Holland attractive for expansion into Europe and the rest of the globe. Do you want to know more about the criteria that have to be met to receive this full exemption? Give us a call!
Other tax advantages in Holland regarding companies, include financing (including hybrid debt) with no withholding tax on interest, services, and royalty payments. Holland also offers the innovation box regime under which profits from eligible intangible assets are taxed at an effective rate of 5%. Also, Dutch holding entities are generally subject to 25% corporate income taxation on their profits. Holland does not appear on most black lists issued by different jurisdictions for anti-abuse purposes.
Directly held Dutch subsidiaries of Dutch companies can form a fiscal unity if certain conditions are met. Do you want to know more about these conditions? Please contact us!
The benefit of being in a fiscal unity is that for Dutch tax purposes the entities are taxed as if they were a single taxpayer. And corporate reorganizations can occur on a tax-deferred basis; this includes mergers, split-offs, share for share exchanges, and asset for share exchanges. Holland also offers a reinvestment reserve. This means that the taxation of gains realized on the sale or conversion of tangible or intangible business property is not held as a passive investment but may be deferred if the taxpayer intends to repair the property or reinvest the gain.
Dutch tax authorities
Last, but certainly not least, the Dutch tax authorities have an open attitude. In contrary to other countries, Holland offers the possibility to discuss tax positions in advance with the Dutch tax authorities. These discussions can be formalized in agreements (or rulings) with the Dutch tax authorities.
More information about tax advantages Holland
Would you like to get in touch to receive more information? Please contact us by phone (+31 6 42 31 1000) or send an email at [email protected].