The Dutch taxation system is complex as it implies several taxes imposed on individuals and companies at different rates. These are calculated based on the tax returns filed by both categories of taxpayers, which is why it is important to pay attention to the type of income and amounts of money earned in a calendar year.
One of the important levies in the Netherlands is the capital gains tax, however, individuals and companies can benefit from exemptions when paying it in most of the cases.
Below, our company formation agents in the Netherlands explain how capital gains are taxed in this country. You can also rely on us for guidance in starting a business here.
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The imposition of the capital gains tax in the Netherlands
The tax on capital gains is a levy imposed on the sale of various assets and it is assessed based on the difference between the sale and purchase price of the respective assets. The capital gains tax is imposed based on specific tax brackets in the Netherlands.
The following assets can be considered when it comes to the Dutch capital gains tax:
- – real estate ownership;
- – company shares.
It should be noted that in the Netherlands, the capital gains tax can be reduced or exempt under the country’s double taxation agreements, but also under specific circumstances.
Our Dutch company formation specialists can offer more information on how the capital gains tax is imposed.
You can also read about the Dutch capital gains tax in the infographic below:
The capital gains tax imposed on individuals in the Netherlands
Just like any other tax imposed on personal income, the capital gains levy is based on the taxpayer’s residency status. This means that Dutch residents are taxed differently compared to non-residents.
Dutch residents are imposed the capital gains tax, if it applies, on their worldwide income, while non-residents will be taxed only on the income made in this country.
When it comes to the sale of real estate property, Dutch residents are liable to the capital gains tax only if they own the respective properties for more than 5 years. The other aspects to consider are:
- if the property is jointly owned by a married couple;
- if they have own it for 10 years before the sale;
- if this is their only capital gains source in the Netherlands;
- if the minimum value of the property was 250,000 euros at the time of the purchase;
- if it has increased in value between the period of the purchase and sale;
- if the couple has another property.
It should be noted that investment income will not be imposed with any capital gains tax on residents and non-residents unless it enters the second and third boxes of the Box System.
Starting with 2017, income checked in Box 3 is imposed at progressive rates under the following percentages:
- – 1.80% on assets with values between 30,846 euros and 103,643 euros;
- – 4.22% on assets with values between 103,643 euros and 1,036 million euros;
- – 5.33% on assets with a total value of more than 1,036 million euros;
- – other fixed returns are taxed at a flat rate of 30%.
It should be noted that these rates can be altered anytime the Dutch Ministry for Finance makes amendments to the tax legislation.
Our company registration advisors in the Netherlands can offer more information on how to set up a business in this country.
The capital gains imposed on company shareholders in the Netherlands
As a shareholder in a Dutch company, a resident or non-resident individual has several benefits, among which the exemption from the capital gains tax.
This exemption is available for resident corporate shareholders if they own at least 5% of the nominal share capital in a company. It is also known as the participation exemption.
In the case of foreign corporate shareholders, these will not pay any capital gains tax if their country of origin has a double taxation agreement with the Netherlands. Also, in the case of disposal of shares, such transactions will not be considered for taxation as capital gains if they are deemed as trading assets.
Investments deemed as capital gains are not subject to taxation in the Netherlands if they are reinvested in the business.
When it comes to the capital gains tax, there are various aspects to consider upon its calculation which is why it is important to discuss with specialists in this matter. We also offer various accounting services, including tax planning and minimization solutions available to companies and individuals, no matter if they are residents or non-residents in the Netherlands.
For detailed information on the capital gains tax in the Netherlands, please contact our local consultants. You can also rely on us for assistance in opening a company in the Netherlands.