Consumption taxes

Nature of the tax

BTW (Belasting Toegevoegde Waarde - the Dutch equivalent of the VAT)

Tax rate

19%

Reduced tax rate

Netherlands apply a reduced VAT rate of 6% on certain categories of goods and services, including foodstuffs, water supplies, pharmaceutical products, medical equipment for disabled persons, books, newspapers, hotel accommodation…

Other consumption taxes

Liquor tax, tobacco tax, gasoline tax, aviation fuel tax, liquefied petroleum gas tax, petroleum tax, motor vehicle tax, etc.

Corporate taxes

Tax rate

Tax rate for foreign companies

Resident companies are subject to taxation on their worldwide income, and non-resident companies are subject to corporate income tax on certain Dutch-source income.

Capital gains taxation

There is no specific tax rate for capital gains but gains and losses are included in the company’s general taxable income.Capital gains are therefore taxed at 25.5% (normal corporate income tax). The basis for calculating a capital gain or loss is the difference between the book value of an asset (original cost minus depreciation) and the amount for which the asset is sold (which under circumstances can be replaced by the fair market value)..

Main allowable deductions and tax credit

Costs incurred in setting up a business, reserves earmarked for certain types of future spending and book profits, rents, royalties and interest payments on corporate debt, remuneration paid to members of the managing and supervisory boards, many types of taxes, bad debts, capital losses, pension plan contributions, commissions, bonuses paid to employees through an internal profit-sharing plan, gifts to contributions to religious, social, charitable and other institutions and mixed expenses.

Foreign tax credits on dividend, interest and royalty income are limited to taxes withheld from income items originating either in a country that has concluded a tax treaty with the Netherlands or certain developing countries listed by the State Secretary of Finance. However, a Dutch company may not credit any foreign withholding tax levied on dividends received from foreign subsidiaries to which the participation exemption applies.For additional information.

Other corporate taxes

Transfer tax is levied on the acquisition of property in the Netherlands at a rate of 6% of the market value of the property. Insurance tax at a rate of 7% applies on insurance premiums, but life, accident, medical, invalidity, disability, unemployment and transport insurance are exempt.

 

Motor vehicle tax is paid on all vehicle ownership, with the amount depending on the type and weight of the vehicle and, for private cars, the type of fuel.

In the overseas municipalities of Bonaire, St. Eustatius and Saba (also known as the BES islands), there is no corporate income tax on revenue or profits. Instead, two alternative taxes have been introduced: a tax on real estate (property tax) and a withholding tax on revenue distributions.

Individual taxes

Tax rate

Allowable deductions and tax credit

Employer reimbursement of (international) school fees. Tax deductions: interest allowance for mortgage interest related to real property in the Netherlands.

Tax exemptions: an employee subject to the 30% tax ruling (if a resident of the Netherlands) can opt for partial non-resident status, which implies that income (assets/savings) may be tax-exempt in the Netherlands.

Special expatriate tax regime

An employee assigned to the Netherlands who has specific expertise that is not available or that is scarce in the Dutch labor market is eligible to apply for a tax-exempt allowance of 30% of his/her salary. A request must be made to apply the 30% ruling within four months of starting employment. Once approved, the allowance applies for a maximum term of ten years, with an interim test to determine whether the expatriate continues to satisfy the conditions to qualify for the 30% ruling. Employees who do not qualify for the 30% ruling still may receive a tax-free reimbursement of actual extra-territorial expenses.

Double taxation treaties

Countries with whom a double taxation treaty have been signed

See the list of the conventions signed

Withholding taxes

Withholding taxes are: 15% for dividends. There are not any tax rates on interest and royalties.

Bilateral agreement

theNetherlands and Tunisia are bound by a double taxation treaty: yes

Sources of fiscal information

Tax Authorities

Belastingdienst

The Ministry of Finance of the Netherlands

Other domestic resources

Dutchtaxes.net on taxes in the netherlands