Tax Obligations after Setting Up an LLC in the Netherlands

The limited liability company, BV or LLC, is the most common business form registered in the Netherlands. It benefits from low company formation costs and a simple registration procedure; however, it will be subject to specific tax obligations.

The first obligations related to the registration of an LLC are registering for taxation and for VAT purposes with the Dutch tax authorities. Below, our Dutch company formation agents have outlined the tax obligations after setting up an LLC in this country.

We can also help foreign investors who want to open companies, no matter their type, in the Netherlands.

Fiscal liability after setting up an LLC in the Netherlands

In order to have an accurate picture of the fiscal liability of a BV company in the Netherlands, the shareholders must define the accounting department of the company. While this department will be in charge of supervising the financial activities of the company and registering all the invoices and other financial documents of the business, the director or directors will have the task of reporting to the authorities (tax authorities and Trade Register) and to the shareholders the financial status of the company.

Financial documents which need to be filed by Dutch LLCs

There are two types of BV companies which can be established in the Netherlands. The first one is the regular BV and the second one is the simplified BV. This categorization is necessary as the tax obligations to be respected depend on the chosen structure for the BV. Our company registration consultants in the Netherlands can explain the differences between the two types of LLCs.

The BV is required to file the following financial documents with the Dutch tax authorities:

1.           the annual financial statement which must comprise the annual report and the annual accounts;
2.           the corporate tax return which must contain information on the corporate income of the business;
3.           the audited annual account must be filed in case the company is a medium or large-sized enterprise;
4.           transfer pricing financial documents must be filed by BVs undertaking inter-company transactions;
5.           VAT returns which must be filed based on the chosen tax period by the LLC.

Simplified BVs which are categorized as small enterprises must file the annual financial statement with annual accounts which need not be audited, the balance sheet and notes which explain the balance sheet. They must also file corporate income tax and VAT returns if they are registered for VAT.

The annual financial statements of an LLC in the Netherlands

Filing the annual financial statement is the most important tax obligation which must be fulfilled by a BV in the Netherlands. It must contain the following:

• -          the annual report which is made of the director’s report on the financial situation of the company;
• -          the annual accounts which must contain the balance sheet, the profit and loss account, notes on the balance sheet and profit and loss account, the cash flow statement;
• -          the audited accounts of the company which can be accompanied by various notes on the improvement of the company’s financial situation.

Before filing the annual financial statements, they must be presented to the BV’s shareholders during the Annual General Meeting.

The filing of the financial statements must follow these requirements:

• -          they must be prepared at least 5 months after the end of the calendar year;
• -          they must be presented to the shareholders no later than 2 months after the preparation;
• -          they must be filed with the tax authorities no later than 8 days after the shareholders have approved them.

We also offer accounting services for LLCs in the Netherlands, among which the preparation and filing of the financial statements are of the highest importance.

The corporate income and VAT tax returns for a Dutch BV

The tax obligations after setting up a Dutch LLC also imply filing a corporate tax return which must occur no later than 5 months after the end of the previous financial year. The document is revised by the tax authorities and based on it the tax assessment based on which the corporate tax must be paid is issued.

This requirement also applies to Dutch branch offices of foreign companies.

Dutch LLCs must also file VAT returns based on the amount of money representing the VAT on its transactions. The VAT returns must be filed based on the following calendar:

• -          monthly reports must be filed for amounts of more than 15,000 euros per month;
• -          quarterly reports must be filed for amounts between 1,883 and 15,000 euros per month;
• -          annual reports must be filed for amounts below 1,883 euros per month.

For full information on the tax obligations of LLCs in the Netherlands, please contact us. We remind you that we are at your disposal with full company formation services in the Netherlands.