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Fiscal Advantages for Opening a Company in the Netherlands

Fiscal Advantages for Opening a Company in the Netherlands

Starting a business in the Netherlands has many advantages, among which the easy and fast registration procedure and the possibility of operating in some of the newest industries which in other countries are not as developed as here.

Opening a business in the Netherlands has other advantages as well, among which many fiscal benefits which cannot be ignored. Those who want to set up businesses here can benefit from specialized Dutch company formation services offered by our local consultants.

What are the main fiscal incentives for setting up a Dutch company?

The Dutch government has progressed a lot in terms of fiscal advantages offered especially to foreign investors opening companies here. Among these, some of the most important are represented by:

  • –          various tax exemptions related to specific activities, such as research and development;
  • –          the 30% tax ruling, which was implemented a few years ago and which has become very popular;
  • –          several tax deductions available during the first 3 to 5 years from starting a business;
  • –          withholding tax exemptions for Dutch companies asking for financing.

These are just a few of the fiscal advantages offered for starting a business in the Netherlands.

We offer a wide range of accounting and bookkeeping services to those interested in opening companies in the Netherlands and seeking to benefit from the fiscal advantages mentioned above.

Tax exemptions for setting up a business in the Netherlands

While the company registration procedure is quite simple in the Netherlands and does not imply high costs, starting operating will imply various costs which is why the government has enabled various exemptions under the form of tax breaks.

Among these, we mention the following:

  1.           dividends received by a Dutch company under the participation regime are exempt from taxation;
  2.           capital gains received after their sale under the same participation regime are also exempt from taxation;
  3.           the innovation tax regime provides for several tax deductions related to activities in the research and development field;
  4.           shipping companies also benefit from a special tax regime based on their tonnages;
  5.           Dutch companies created as investment funds can also benefit from lower taxes or no taxes, provided that meet certain qualification criteria.

Our company formation agents in the Netherlands can offer more information on the tax breaks available when opening a business in this country.

The 30% tax ruling in the Netherlands

One of the most popular fiscal advantages when starting a business in the Netherlands as a foreigner is the 30% tax ruling which is beneficial for both the company owner acting as an employer, but also for the employee. The main condition is for the Dutch company to hire highly-skilled migrant workers in order to benefit from this fiscal advantage.

Many foreign investors decide to set up businesses here because of this tax benefit.

If you want to know more about the 30% tax ruling, you can reach out to Dutch experts who can explain the conditions of this fiscal advantage.

Tax deductions for newly-incorporated businesses in the Netherlands

Foreign investors who open companies in the Netherlands can benefit from various tax deductions which can span over 3 or 5 years since the business first started its operations. Among these are:

  • –          the self-employment tax deduction;
  • –          the profit exemption for qualifying small and medium-sized entities;
  • –          the general tax and labor credits;
  • –          the starter deduction or exemption.

In order to benefit from any of the tax deductions and exemptions mentioned above, a company must meet certain requirements. Among these are:

  • –          the company must have at least 3 clients;
  • –          the entrepreneur must work in the company for at least 1,225 hours per year;
  • –          the company must be independent, meaning it cannot ask for public funds;
  • –          the company must qualify for entrepreneurial risk.

Companies requiring financing at the beginning of their operations can also benefit from various tax exemptions, among which exemptions on the withholding taxes applied to interest, services and royalties payment.

As a general rule, Dutch companies are taxed on their worldwide incomes if they have a management or head office in the Netherlands. The corporate tax is levied at two different rates, depending on the annual turnover of the company: the first rate is 20% for the first 200,000 euros, and the second rate is 25% for any amount of money above 200,000 euros.

For full information on other fiscal advantages related to opening a company in the Netherlands, you can rely on us. Please contact us if you need company registration or accounting services in the Netherlands.