The Dutch tax system has a number of features that may be very beneficial in international tax planning. These include a corporate income tax rate of 20 percent on the first €200,000 and 25 percent for taxable profits exceeding €200,000. In addition, the Dutch ruling practice provides clarity and certainty in advance on future tax positions. Furthermore, in respect of R&D, companies can benefit from the innovation box resulting in an effective corporate tax rate of only 5 percent, as well as an R&D allowance (WBSO) taking the form of wage tax and social security contribution deductions.
Dutch tax law also provides the participation exemption, which states that all benefits related to a qualifying shareholding are exempt from Dutch corporate income tax, as well as the fiscal unity regime, designed to freely offset profits and losses among group members. There are also advantages in debt and loss structuring, and a wide tax treaty network, resulting in reduction of withholding taxes on dividends, interests and royalties.
Additionally, there is the 30 percent ruling, which is a tax-free reimbursement of 30 percent of the employee’s salary, provided that the employee has been recruited or assigned from abroad and has specific expertise scarce in the Dutch labor market.
Finally, the Dutch Customs authorities are well known for their practical and pro-active approach towards facilitating international trade and optimizing customs procedures. This fact underlies the Netherlands’ preferred status as a country in which to base importing activities.
*More info at: Invest in Holland
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