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Taxation of a Cooperative in the Netherlands

Taxation of a Cooperative in the Netherlands

Enterprisers who want to open holding companies in the Netherlands can set up cooperatives which are legal entities offering advantageous tax conditions for those registering them. The cooperative can be used to hold assets in one or more companies, which is why it is preferred by foreign investors.

The taxation of a Dutch cooperative occurs the same way as for any other type of company in this country. Below, our company formation agents in the Netherlands explain how cooperatives are taxed.

What taxes does a cooperative pay in the Netherlands?

The cooperative will be subject to the corporate tax which is applies just like in the case of Dutch private and public companies. A particularity of the Dutch cooperative is that its members will be taxed separately. They will be subject to the income tax in the Netherlands.

Dutch cooperatives and the dividend tax

Another important aspect which must be considered when opening a cooperative in the Netherlands is the possibility of being exempt from paying the dividend tax, provided that certain conditions are met. These conditions are:

  • – the member qualifying for the exemption must hold at least 5% of the capital in a subsidiary company held by the cooperative (the 5% must represent the nominal value of the share capital);
  • – the shares held cannot be in a subsidiary which benefits from a low taxation level;
  • – the member holds shares in a subsidiary whose capital is made up of real estate assets in proportion of 90% or more.

Our Dutch company formation advisors can offer more information on the participation exemption for qualifying cooperatives.

Taxation of members in Dutch cooperatives

As mentioned above, the members of cooperatives in the Netherlands will be taxed separately. Furthermore, their taxation will depend on whether they are natural or legal persons. While natural persons will be applied the personal income tax, legal entities will be subject to the corporate tax. In the case of foreign shareholders, the corporate tax will apply to the incomes generated through the Dutch cooperative.

Cooperatives under the Netherlands’ double tax treaties

Considering cooperatives are deemed as corporate bodies when it comes to taxation, they will fall under the provisions of Dutch double tax treaties. From this point of view, foreign members of Dutch cooperatives will have many benefits as the Netherlands has almost 100 double tax agreements.

For more information on the taxation of Dutch cooperatives, please feel free to contact us. We can also help with the registration of a cooperative in the Netherlands.