Corporation tax rates
The corporation tax rate depends on the taxable amount. The taxable amount
is the taxable profit in a year less deductible losses.
taxable amount is less than €200,000, the tax rate is 20%.If the
taxable amount is €200,000 or higher, the tax rate is 25%.
A reduced rate applies to activities covered by the innovation box. The
innovation box provides tax relief to encourage innovative research. All
profits earned from innovative activities are taxed at this special rate.
Tax groups with subsidiary companies
In principle, every company pays its own corporation tax. However, if a
parent company forms a tax group with one or more of its subsidiaries, the Tax
and Customs Administration will on request treat the companies as a single
The main benefit of a tax group is that a loss incurred by one company can be
deducted from the profits earned by other companies in the group.
The formation of a tax group is subject to certain conditions. The main
condition is that the parent company holds at least 95% of the shares in the
subsidiary. In addition,
the parent company and subsidiary must:
same financial year;apply
the same accounting policies;be
established in the Netherlands.
Netherlands has traditionally provided favourable tax conditions for international
businesses seeking to expand or start up new activities. This is
the case today, despite international pressure on countries to refrain from
tax competition. In response, the Netherlands has introduced a number
tax reforms that now provide a modern, stable tax environment in line with
norms. An overview of the tax incentives currently in place is
in certain types of assets can qualify for a special deduction
calculating taxable profits. This deduction is in addition to the normal
claimed and is calculated as a percentage of the qualifying
The relief falls broadly into the following three categories:
deduction is available for investments in business assets of EUR 2,300 up
EUR 11,242 per calendar year. The deduction is 28 percent for investments
EUR 2,300 up to EUR 56,024. The maximum deduction is EUR 15,687 for
of EUR 56,024 up to EUR 103,748 after which the deduction
decreases to nil until the invested amount reaches EUR 311,242.
investment allowance (EIA)
deduction is available for investments in qualifying new energy-saving
The total maximum investment qualifying for relief is EUR 120 million.
relief amounts to 58 percent of the investment if it exceeds EUR 2,500 per
investment allowance (MIA)
deduction is available for investments in qualifying new assets that
to the protection of the environment. The relief provided is 36
27 percent, or 13.5 percent, depending upon the type of asset and
the investment exceeds EUR 2,500 per calendar year. This relief is not
to the extent that the energy investment allowance has been claimed
the same investment.
and Development (Promotion) Act (WBSO)
engaged in certain R&D activities are entitled to a payroll tax
(WBSO). The reduction amounts to 32 percent (40 percent for
of the relevant payroll costs relating to R&D (R&D payroll costs, but
other R&D costs and R&D investment expenditures), up to a maximum
EUR 350,000, and 16 percent for any excess. For activities to qualify for the
a certificate (S&O-verklaring) must have been issued by the Netherlands
Agency (Rijksdienst voor Ondernemend Nederland). Applications for
must be filed before the R&D project commences.
2016, only R&D payroll costs qualified for the WBSO payroll reduction.
from 2016, other costs and investment expenditure associated with R&D are
for the WBSO payroll tax reduction. There are two options for calculating
reduction that can be attributed to these other costs and expenditure: (1)
or (2) real costs and expenditure.
fixed reduction is based on a fixed amount of EUR 10 for the first 1,800
hours, and EUR 4 per hour thereafter. No separate administration is
of the other R&D-costs and expenditure. For the real costs and
option all the costs and expenditure per R&D project may be
A comprehensive administration per project is needed to subsequently
the costs and expenditure. The eligible costs and expenditure are added
the eligible R&D payroll costs (R&D hours x average R&D wage rate)
the total amount of the WBSO payroll tax reduction.
regime for income from patents – the Innovation Box
stimulate R&D activity in the Netherlands, a special elective regime known
the Innovation Box” (formerly the Patents Box) is available for income
self-produced qualifying intangible assets. Under this regime, qualifying
is taxed at an effective rate of 5 percent, which is achieved by way of
80 percent reduction of the income derived from the qualifying assets.
speaking, intangible assets will qualify for the regime if they are
or derived from R&D activities that benefit from the R&D incentive
referred to as WBSO (see above). The Innovation Box may also apply to
software, production methods, product development or improvement,
example. It does not apply to marketing intangibles such as trademarks
logos. Subject to certain conditions, assets that are partially derived from
R&D may also qualify.
Innovation Box regime covers all income attributable to qualifying assets,
capital gains. In the case of patents, the regime covers not only
income but also income derived from the sale of products or services
upon the innovations. The election is made per asset, but, once elected,
assets and related income are pooled.
of 2013, it is also possible to fix the income attributable to qualifying
25 percent of profits, up to an annual maximum of EUR 25,000, although this
subject to certain conditions. The Innovation Box also applies to profits
the use of an intangible asset from the year the patent is requested to the
in which the patent is granted. The election does not have to be made until
tax return is filed. Once made, an election cannot be revoked.
is no cap to the income that can benefit from this regime, but it generally
covers income in excess of related development costs in the pool.
in respect of assets covered by the innovation box are also effectively
against corporate income at the regular tax rate. As a result of new
Union rules and policies, the Dutch rules for access to the Innovation
and for the computation of the in scope profits are likely to be changed
the new rules will take effect no later than 1 January 2017. In all likelihood,
using the Innovation Box as at 30 June 2016 for certain assets will be
to benefit from the existing Innovation Box regime until 30 June 2021
the latest with respect to those assets. The existing Innovation Box regime is
likely to remain open to new entrants
until 30 June 2016.
main rule is that all expenses incurred for the purposes of carrying on a
are deductible when calculating taxable profits.
Dutch corporate income tax and, if a double taxation relief provision applies
income is exempt from Dutch tax, foreign taxes on income or profits
boats used for business entertainment, such as customer receptions
certain fines and penalties imposed under Dutch or European law (including
penalties and traffic fines).
non-deductible is 0.4 percent of the total wage bill, with a minimum amount
EUR 4,500. Alternatively, 26.5 percent of certain expenses are non-deductible:
food and drink
conferences, staff excursions, and similar activities.
income tax deductions for equity-settled awards such as shares,
options, warrants, restricted shares, and restricted share units generally
not applicable in the Netherlands. The costs associated with cash settled
can be deducted at the moment of payment, provided the employee
not obliged to convert the cash payment into company shares. Stock
rights are not deductible when granted to employees with an
salary of EUR 556,000 or more.
development costs for in-house developed intangible assets may be
in the year the development costs are incurred.
number of other, primarily anti-avoidance, provisions specifically restrict the
deduction of certain expenses, including
means that the company ceases to exist. Once the liquidation
settled, there is no longer a corporate income tax liability. The company
prepare a final balance sheet for tax purposes at the time of liquidation,
its assets and liabilities at their fair market value. This ensures that all
not yet reported for tax purposes are included in the profit for the final
distribution in excess of the average paid-in capital (i.e. the liquidation
is considered a dividend for dividend withholding tax purposes
subject to 15 percent withholding tax. Exemptions or applicable double
treaties may reduce this withholding tax.
is unlikely to result in a corporate income tax charge. Specific case
regarding liabilities must be taken into account. The company’s directors
fulfil special reporting requirements to avoid personal liability, especially
wage tax and VAT.
and cross-border asset transfers
tax may arise if the company relocates abroad.except to the extent that
are retained by a Dutch permanent establishment.
tax also applies on the transfer of assets to a foreign head office and
the closure of a permanent establishment. In both cases the exit tax is
computed by reference to a deemed gain in respect of the assets
including any untaxed gains and reserves and provisions. Exit tax
not usually payable on the transfer of assets from a Dutch head office to a
permanent establishment (although the untaxed gains and reserves
effectively be taxed in subsequent years due to a lower exemption applying
the profits of the permanent establishment).
that are residents of an EU Member State or an European Economic
Member State may not have to pay the full amount of exit tax in one go.
exit tax rules allow taxpayers to choose between immediate taxation, a
until subsequent realisation and payment in ten annual instalments.
the taxpayer opts for immediate taxation, interest will be payable on
deferred tax, and the tax authorities will require collateral. Under Dutch
a bank guarantee will often be the preferred form of collateral. However,
to recent case law of the CJEU a requirement to provide a bank
for exit tax may only be imposed on the basis of the individual actual
of non-recovery of the tax. If the taxpayer opts for deferral until realisation
also have to provide an annual balance sheet and income statement drawn
in accordance with Dutch tax law so the Dutch tax authorities can determine
whether there has been a realisation.