The Netherlands and France have good trading relations which date many years back. The two countries also signed a double taxation agreement in 1949 which was last amended in 1973. The last Netherlands – France double tax treaty was enforced in 1974. The agreement for the avoidance of double taxation covers the income tax and the capital taxes imposed in both countries, as well as elements of these taxes. In the case of France, the agreement covers the following taxes:
- – the income tax;
- – the corporate tax.
In the case of the Netherlands, it covers the following taxes:
- – the income tax on salaries and pensions;
- – the corporate tax;
- – the dividend tax;
- – the wealth tax.
The Netherlands – France double tax treaty also applies to similar taxes imposed in both countries.
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Avoidance of double taxation in the Netherlands and France
The double taxation treaty between the Netherlands and France applies to both individuals and companies with a residence, respectively with management places in one of the two contracting countries. The treaty also provides for permanent establishments and associated enterprises of French and Dutch companies in the other country which will be taxed in that country on the income earned there. The income arisen from immovable property will be taxed in the country where the property is located.
Our Dutch company formation representatives can offer information on the methods used by the Netherlands in order to avoid double taxation.
Special tax rates under the Netherlands – France double tax treaty
In order to provide for prolific trading relations, the Netherlands and France have agreed upon reduced tax rates for certain incomes, as it follows:
- – income derived from dividend payments will be taxed at a 5% rate for companies owning at least 25% in the company paying the dividends and a 15% rate in all other cases;
- – income derived from interest payments will be imposed a 0% tax rate in the home country of the beneficiary, however these may be taxed in the other state at a maximum rate of 10%;
- – income derived from royalties payments will be taxed at a 0% tax rate.
For full information on the double tax treaty with France or for assistance in opening a company here, please contact our company registration agents in the Netherlands.