If you’re setting up a business in the Netherlands, it’s important to get to grips with the corporate tax you’ll need to pay on any of your company’s profits.
This guide to corporate tax in the Netherlands includes advice on the following:
- The corporate tax system in the Netherlands
- Who pays corporate tax in the Netherlands?
- Corporate tax rates in the Netherlands
- Corporate tax exemptions and credits in the Netherlands
- VAT in the Netherlands
- Corporate tax year in the Netherlands
- How to file your corporate tax return in the Netherlands
- Other types of business tax in the Netherlands
- Corporate tax fines in the Netherlands
- Corporate tax advice in the Netherlands
- Useful resources
The corporate tax system in the Netherlands
The Netherlands has a range of structures available to entrepreneurs, partnerships and businesses, all of which come with their own tax rules.
Corporate tax rates in the Netherlands have been falling in recent years, and that’s set to continue. In 2022, the Dutch government intends to increase the threshold for the lower corporate tax rate from €245,000 to €395,000.
Who pays corporate tax in the Netherlands?
Public and private companies in the Netherlands must pay tax on their profits. Whether you’ll need to pay income tax (inkomstenbelasting) or corporate tax (vennootschapsbelasting or VPB) depends on the type of business you run.
The tax authority will inform you of which tax you’re liable for once you’ve registered your company with the Kamer van Koophandel (the chamber of commerce).
Corporate tax for sole traders
Sole traders (eenmanszaak or ZZP, zelfstandige zonder personeel) in the Netherlands must pay Dutch income tax rather than corporate tax on their profits.
Tax is levied under Box 1 rates (taxable income from employment and homeownership). The rate you’ll pay depends on how much money you make. Profits of up to €68,507 are taxed at 37.1%, while income over that limit is taxed at 49.5%.
Self-employed entrepreneurs may be entitled to private business ownership allowance and other entrepreneur allowances. In 2021, those eligible can deduct €6,670 from their profits when filing their tax returns. This deduction will gradually reduce between now and 2036 when it will be €3,240.
You can find out even more about taxes for sole traders in our guide to freelance taxes in the Netherlands.
Corporate tax for partnerships
In a partnership, each partner pays income tax on their share of the profits at the rates above.
In public partnerships (maatschap) and commercial partnerships (a vennootschap onder firma or VOF), partners are considered individual self-employed workers. As a result, they may be eligible for benefits such as entrepreneur allowances.
The system is slightly different for people with limited partnerships (ommanditaire vennootschap or cv). Limited partnerships consist of a managing partner as well as a limited partner. If you’re the managing partner, you pay income tax on your share of the profits and can claim entrepreneur allowances. Limited partners are not considered entrepreneurs, so won’t be eligible for these allowances.
Corporate tax for limited companies
If you set up a limited company in the Netherlands (besloten venoostschaap or BV), you’ll usually need to pay corporate tax on its profits.
Limited companies are eligible for some allowances, such as investment allowance. However, these companies aren’t eligible for private business ownership allowance.
If you own at least 5% of the company’s shares, you’ll be considered a director and major shareholder of the company, meaning you’ll need to pay Dutch income tax if you take a salary from the company.
Corporate tax rates in the Netherlands
How much your company needs to pay in corporate tax depends on its taxable amount. This is the final profit figure on your tax return after deducting allowances and credits.
Taxable amounts of up to €245,000 are charged at 15% in 2021 (down from 16.5% in 2020), while amounts above this threshold are taxed at 25%.
The Dutch government plans to increase the €245,000 threshold to €395,000 in 2022.
Corporate tax exemptions and credits in the Netherlands
Exemptions in the Netherlands
Some types of companies in the Netherlands are exempt from corporate tax. Foundations and associations don’t need to pay corporate tax if one of the following two rules applies:
- The taxable profit in the year in question does not exceed €15,000.
- The taxable profit does exceed €15,000, but when added to the profit for the last four years the total does not exceed €75,000.
If you qualify for one of these exemptions, the tax authority should apply it automatically and provide you with a nil assessment.
Credits in the Netherlands
A reduced corporate tax rate is available to companies whose work fits in the innovation box. The innovation box gives tax relief to companies who undertake innovative research. If your business qualifies, you pay corporate tax at a rate of 9% in 2021 (up from 7% in 2020).
New business tax credit
If you start a business in the Netherlands, you may be eligible to claim tax relief for new companies (startersaftrek). This relief is part of the entrepreneur allowance.
When filing corporate tax returns, companies can offset losses against future profits. Companies with profits of more than €1 million can only offset 50% of profits over this amount with losses from previous years.
Companies can no longer offset the depreciation of buildings their company uses when filing their tax return.
Investment and environmental credits
Some companies can claim deductions for small investments and investments in energy-efficient and environmental assets. The eligibility rules for these credits can be complicated, and more information is available in the guide from PwC.
VAT in the Netherlands
Companies in the Netherlands need to sign up for value-added tax, which is called BTW (Belasting Toegevoegde Waarde).
BTW applies when you sell or buy goods or services. Rates vary depending on the type of goods or services:
- The standard 21% BTW rate applies to most taxable activities.
- The low 9% tariff applies to the sale of goods including food, drink, agriculture, books, and medicine. See the Dutch government website for a full list of goods and services that benefit from the lower tariff.
- Some goods and services are exempt from BTW, such as goods supplied from the Netherlands to other countries in the European Union.
Your business can submit a VAT return on a monthly, quarterly, or annual basis. Self-employed workers can apply for small-sized entrepreneurs regulation (kleine ondernemersregeling), which can cut the amount of VAT you’ll need to pay. However, this option isn’t available for people who run limited companies.
Corporate tax year in the Netherlands
Corporate tax is based on profits during a 12-month period. As standard, the corporate tax year runs alongside the calendar year of 1 January to 31 December, but companies can instead choose to file their taxes using a broken financial year (for example, from May to April).
How to file your corporate tax return in the Netherlands
At the start of your company’s financial year, you will be sent a provisional corporate tax assessment from the tax authority. This is generally based on the returns you’ve filed in previous years. If you think your profits will have risen or fallen or you disagree with the assessment, you can request an adaptation.
If your company’s fiscal year is the same as the calendar year, you need to file your corporate tax return by 1 June. There are three ways to file your tax return in the Netherlands:
- By submitting your return on the tax authority’s website (in Dutch). You should be provided with login details for this website when you first register your company.
- By using a third-party accounting program.
- By using an accountant, payroll manager, or tax consultant.
It’s possible to apply to delay your filing extension either by logging in online or by filling in a form and taking it to your local tax office. The Belastingdienst should reply to your request within three weeks, and the standard extension is five months.
Other types of business tax in the Netherlands
Companies that pay out profits as dividends to their shareholders must pay dividend tax at a rate of 15%. This tax is withheld from the money paid out to shareholders and can be deducted when filing income tax and corporate tax returns. You can find out more on the Dutch government website.
Businesses may be liable for a range of environmental taxes, which vary depending on the nature of the business. These can include taxes on mains water, energy tax, waste disposal charges, and coal tax. The Belastingdienst maintains a list of environmental tax rates (in Dutch).
Corporate tax fines in the Netherlands
If you fail to pay your corporate tax bill on time, you must pay interest on the late payment, which starts from the day after the payment is due.
Interest on late payments is usually charged at 4%, but this has been decreased to 0.01% until 31 December 2021 as part of the Dutch government’s policies to combat the coronavirus outbreak. You can find out more about how interest accrues on the tax authority’s website (in Dutch).
Self-employed workers who fail to pay their income tax bill on time can be fined 3% of the amount outstanding. If you file your tax return late, you’ll also need to pay a €65 administration fee.
Corporate tax advice in the Netherlands
If you’re unsure about your tax liability in the Netherlands, it makes sense to take advice from an English-speaking accountant or financial adviser. A good adviser will be able to explain everything from choosing the right type of business structure to filing your corporate tax and VAT returns on your behalf.
It’s also worth taking a look at expat groups in your local area on social media for high-quality recommendations.
If you’re a freelancer or self-employed worker, you can find a range of resources on the Dutch government’s website.