The main taxes
The government feels that taxes may not form an impediment for a person or company to reside or establish business in the Netherlands. The Dutch tax system therefore provides a number of incentives for internationally operating companies and foreign employees. Additionally, the Netherlands concluded tax treaties with many other countries in order to prevent double taxation.
The main taxes in the Netherlands include:
Corporate income tax
If you own a private or public limited company (BV or NV), you must complete a corporate income tax return (VPB) for your company. Foundations or associations must complete corporation tax returns only in specific circumstances. Depending on the level of profit, you may be exempt.
Wage tax, income tax and social insurance
If you employ staff in the Netherlands, you must deduct payroll tax (loonbelasting) from their wages. Payroll tax consists of wage tax, employee and national insurance contributions and income-based Health Care Insurance Act contributions (employer's contribution).
Value Added Tax (VAT - BTW)
If you run a business in the Netherlands or if you run a foreign company with a Dutch branch, you may have to pay turnover tax (VAT) in the Netherlands. This also applies if your company is established abroad, but does business in the Netherlands. In all cases you need a VAT number (also known as a VAT identification number).
Dividend withholding tax
If you run a business in the Netherlands and you receive interest, royalties or dividend from abroad, withholding tax (bronbelasting) is often deducted on payment of these sources of income. If the Netherlands has a tax treaty in place with the country from which the income originates, you may be entitled to a full or partial exemption or refund of the tax withheld.
Environmental tax
Business owners in the Netherlands may have to pay various environmental taxes. If your business extracts groundwater, you must pay groundwater tax. You also pay tax on any mains water and electricity used.
Inheritance and gift tax
If you own a business in the Netherlands, your heirs must settle your tax affairs after your death. Furthermore, the Netherlands does not apply any source tax on interest and royalty payments. The Netherlands does not apply a branch profit tax.