Corporate Tax in the Netherlands

The corporate taxation system in the Netherlands offers plenty of advantages to foreign investors. The corporate income tax has two amount rates, which vary on the company’s taxable income. Our Dutch lawyers can help you open a company in the Netherlands and provide full assistance for tax compliance.

Corporate taxation in the Netherlands

Any company incorporated in the Netherlands is considered a Dutch resident company and is subject to corporate taxation. Resident companies in the Netherlands are taxed on their worldwide income and non-resident companies in the Netherlands are only taxed on their income produced in the Netherlands.

Quick Facts
Scope of corporate tax in Netherlands	– worldwide income for resident companies, – income derived from Dutch sources for non-resident companies
Standard corporate tax rate	25.8%
Reduced corporate tax rate	19% for annual income up to EUR 200,000
Main types of companies subject to corporate tax	– private limited company (bv), – public limited company (nv)
Tax groups with subsidiary companies	Subsidiary companies can be grouped with their parent company for tax purposes; Losses from one company can be used to reduce taxes on profits earned by another (offsetting losses).
Exemptions and credits	– for foundations and NPOs, – innovation box, – new business tax credit, – offsetting losses, – investment and environmental credits, etc.
Innovation box – characteristics	9% CIT on profits from patents and some intellectual property assets; 30% of profits must come from patented innovation; CIT rate can also apply to R&D companies.
Structures not subject to corporate income tax	– sole proprietorship, – commercial partnership
Filing corporate income tax returns	At the beginning of the fiscal year
Dutch participation exemption – characteristics	Dutch resident companies avoid corporate income tax on dividends and capital gains if they have shares in other foreign companies. Our lawyers can detail the conditions.
Tax for fiscal investment funds	0% if profits are distributed within eight months after the end of the fiscal year.
Number of double taxation treaties	91 (approx.)
Fiscal year in Netherlands	Generally calendar year. Our attorneys can help you modify the fiscal year if you require.
Other taxes in Netherlands	– VAT, – customs and excise tax, – payroll tax, – social security contributions, etc.
Assistance	Our law firm offers tax minimization strategies for your company.

The corporate income tax rate in Netherlands is 25.8%. However, there’s a lower rate of 19% for the initial income up to EUR 200,000.  

Legal entities such as private limited companies (bv) or public limited companies (nv) are always required to file corporate income tax returns. These returns are necessary regardless if the company makes a profit or not. Individuals, such as sole traders, are taxed through the personal income tax (inkomstenbelasting).  

Some exceptions and special provisions apply to corporate taxation in Netherlands, such as in the case of associations and foundations. Our Dutch lawyers will further explain them.

Special provisions for corporate taxation in the Netherlands

The Dutch tax system provides various incentives and reliefs. For example, certain allowances apply for research and development activities in the Netherlands. This allowance for R&D activities reduces the taxable income of the company. Likewise, companies that operate import and export activities in the Netherlands benefit from a special tonnage tax regime applicable for shipping companies.

The innovation box gives companies a lower corporate tax rate in Netherlands of 9% on profits from assets like patents or intellectual property (IP). To qualify, at least 30% of these profits must come from a patent or the company must spend its capital on research and development for IP.    

The tonnage tax regime is aimed at helping shipping companies. The corporate tax in Netherlands for shipping companies is based on the ship’s tonnage. It applies to activities such as operating ships internationally, laying cables on the sea floor, and towing and dredging. Companies can choose this tax regime for a period of ten years initially, which can be extended. To qualify, the ship must meet some specific criteria. Our attorneys in Netherlands can explain the requirements if you are interested.

Exemptions from the Dutch corporate tax

There are certain income items exempt from the Dutch corporate tax. Our lawyers in Netherlands will explain these exemptions.

Foundations, non-profit associations, and similar organizations are exempt from paying corporate income tax in Netherlands if their taxable profit in any single year does not exceed EUR 15,000. If their profit is higher than EUR 15,000 they can still be exempt if their combined profit from the previous years does not exceed EUR 75,000.

Fiscal investment funds also benefit from exemptions from the Dutch corporate tax. They can benefit from a 0% CIT rate if they distribute their profits to shareholders and certificate holders within eight months after the year-end.

Funds limited to investing in financial instruments (shares, bonds, etc.), traded on recognized stock markets, can also enjoy CIT exemption. These funds are also not required to withhold dividend tax on profits distributed to shareholders.

Please note that from January 1, 2025, fiscal investment funds will no longer be allowed to directly invest in Dutch real estate. Additionally, from January 1, 2025, only regulated institutions under the Dutch Financial Supervision Act will be able to access the exempt investment fund regime. Our law firm in Netherlands can help you in these cases.

Subsidiaries in the Netherlands qualify for the participation exemption (and are thus exempt from corporate tax in the Netherlands) if they are active companies and if the Dutch parent company holds an interest of at least 5% in the company. Such subsidiaries are also subject to a tax test, meaning that they qualify for the participation exemption only if they are subject to a reasonable tax rate in the Netherlands. Likewise, subsidiaries qualify for the participation exemption if less that 50% of their assets are passive assets.

Our Dutch lawyers can help you with more information about the participation exemption and how it can apply to your Dutch company.

Dutch tax rates

If you are interested in learning more about the Netherlands’s taxation system, here are the current tax rates applicable to corporate entities:

• The corporate income tax rate in the Netherlands is 25.8% for annual profits over EUR 200,000 and 19% for any profits below EUR 200,000;
• The standard VAT rate is 20%. Reduced rates of 9% and 0% apply to some goods and services;
• The withholding tax on dividends from Dutch resident corporations is 15%;
• If a company has employees, it must pay social security contributions amounting to 27.65% of the employee’s gross salary.

Among our services, we can also help you with VAT registration in Netherlands. We can also give your more details about the numerous Netherlands double tax treaties concluded so far.

For more information about corporate taxation in the Netherlands, please contact our Dutch law firm.