Netherlands legal and accounting and tax considerations in 2024

• Tax rates

  1. Corporate tax is levied at a rate of 25.8%. A reduced corporate tax rate of 19% applies on profits up to €200,000. Furthermore, Netherlands corporate income tax returns must be filed every year within 5 months from the end of the financial year;
  2. Capital gains tax is levied at a rate of 25% and the dividend withholding tax is levied at 25%. Both these taxes can be exempt if they are derived from a subsidiary of which the parent company holds at least 5% shares and provided that:
     • The subsidiary is not held as a mere portfolio investment;
     • The subsidiary is taxed at a tax rate based on Dutch tax principles; or
     • Less than 50% of the assets are passive assets;
  3. The standard VAT rate in the Netherlands is 21% and returns must be filed quarterly;
  4. Royalty payments and interest payments to a resident business entity are tax-exempt;
  5. Property in the Netherlands is taxed annually at a rate of 6% of their rental value. A 6% transfer tax will also apply when a firm acquires a property.

• Miscellaneous

  1. The Netherlands has signed DTAs with more than 100 countries including Australia, China, India, Germany, Singapore, USA and UK to reduce withholding taxes on foreign payments;
  2. Tax audits on companies happen randomly. Firms can expect a tax audit every 5 years;
  3. Finally, Healy Consultants will assist the Client with i) documenting and implementing accounting procedures ii) Implementing financial accounting software iii) preparing financial accounting records and iv) preparing forecasts, budgets and performing sensitivity analysis;
  4. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.

• Legal and compliance

  • Incorporation regulations

    1. According to the Netherlands company law, a resident company must have at least one director and one shareholder of any nationality;
    2. It is not mandatory for a Netherlands limited liability company to have a director ordinarily resident in Netherlands. However, Dutch limited liability companies without a majority of EU resident directors will not benefit from Netherlands’ Double Taxation Avoidance (DTA) treaties;
    3. A Netherlands resident company secretary, and a local registered address are mandatory.

  • Reporting regulations

    1. Financial Statements must be filed with the Dutch Chamber of Commerce and made publically available in the Dutch trade Register;
    2. Companies will be subject to an audit if i) total assets are more than €4.40 million or ii) turnover over is more than €8.80 million or iii) if the company employees is more than 50 people.

  • Labour regulations

    1. Employers are required to make social security contributions of 31% on all salaries;
    2. A Dutch resident company suffers a payroll tax of 16%. This tax consist of i) wage tax ii) social insurance contributions and iii) health insurance contributions;
    3. In Netherlands, employers are required to provide mandatory occupational accident insurance and health insurance;
    4. Employees are entitled to 4 weeks paid leave per year, and standard office hours are not allowed to exceed 60 hours a week without overtime pay;
    5. In order to terminate an employee, businesses need to i) request permission from the Employee insurance agency (UWV) and ii) provide evidence for reason of termination and iii) severance pay decided by the court;
    6. For a company with 50 employees or more, it is mandatory for firms to create a work council elected by staff members to communicate with management about legal issues and company decisions.