Tax minimization can be defined as a set of strategies used by Dutch companies which want to reduce the overall taxes, while doing business in the Netherlands. Tax minimization in the Netherlands uses different legal procedures to arrange the investments and expenses of the company. Our company formation agents in the Netherlands can help you find out more about efficient tax planning and tax minimization strategies in the Netherlands.
If you are operating a company in the Netherlands, you need to consider efficient tax planning in order to avoid paying more taxes than necessary. A good knowledge of the Dutch taxation system is useful for this purpose, but foreign entrepreneurs in the Netherlands can also employ the services of a professional tax planer. A strategic tax planning scheme guarantees that you won’t miss any significant tax saving opportunities.
Tax deductions which can be obtained on a yearly basis can help reduce the overall taxable income of the company. In the Netherlands, the tax year is generally the calendar year and tax returns must be filled by April 1st.
Special investments can also contribute to tax reductions. The contributions made to retirement plans, for example, should be carefully controlled. Other tax planning strategies may include donating different assets, rather than selling them or, if deciding that they should be sold, to use the capital gains deduction. Securities should be sold in years when other capital assets can yield long-term capital gains.
Our tax advisers and Dutch company formation agents can help you determine the best investment plan.
One of the main ways through which foreign entrepreneurs can minimize the taxes they pay in the Netherlands is the special purpose vehicle, shortly known as the SPV. This type of structure allows investors to pool various assets into a company registered in the Netherlands which will administer these assets. The SPV is a holding company which can benefit from many tax deductions under the double tax treaties signed by the Netherlands. Among these deductions, we remined dividend payments, interests and even royalties.
The double tax treaties mentioned above the most employed tax minimization solutions in the Netherlands because they offer transparency and are also covered by various EU directives, such as the Parent-Subsidiary Directive. Under most Dutch double taxation conventions, the Netherlands provides for reduced tax rates, tax exemptions and tax consolidation measures in the case of permanent establishment of foreign companies operating here.
These double tax treaties are also enforceable in relation to the incomes generated by foreign individuals residing or working in the Netherlands and help them to reduce the taxes they pay in their home countries. For example, the income resulted from employment in the Netherlands will only be taxed here.
Among the services offered by our company are also accounting services for foreign and local citizens and companies in the Netherlands.
The rate of the corporate tax in the Netherlands is 20% for the first 200,000 EUR of the taxable profit and 25% on taxable profits larger than 200,000 EUR. There is no applicable alternative minimum rate and investors should know that a participation exemption applies. The value added tax (VAT) in the Netherlands has a standard value of 21% and there is also a reduced rate applicable to certain services and goods.
If you want to know more about the conditions applicable for foreign investors in the Netherlands, please contact our company incorporation agents. We can help you with company formation services in Amsterdam, Rotterdam and other major cities in the Netherlands.