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Dutch Tax Tips: Starting a business in the Netherlands

Updated time: 09 Jan, 2019, 16:45 (UTC+08:00)

In the Netherlands there are several business types, but the most common are the Besloten Vennootschap (BV), which is comparable to a Limited Liability Company, and the VOF / Eenmanszaak (Partnership / Sole Tradership).

Registering your business

If you are establishing a Dutch branch of your business or are starting up a business, you must register your business at from the Chamber of Commerce

For this you will need the appropriate application forms, available from the Chamber of Commerce, which must be completed in Dutch.

You can also register a Dutch branch of your business as a foreign legal business (Ltd, GmbH or SA) or you may register it as a BV. The choice is up to you: there is no requirement to select the Dutch legal entity.

Starting up a BV (subsidiary)

Opting for the BV structure means you create a separate entity for the Dutch business operations, where all liabilities and risks are undertaken by the Dutch entity.

The organisation will be treated as a Dutch company owned by you or by an established parent (holding) company. Establishing a business structure with a holding company at the head has several benefits as compared to a sole BV structure.

Starting up a branch organisation

If you choose to organise your business as a Dutch branch with a head office outside the Netherlands, then the foreign company will be the main player in the structure. Liabilities will shift from the Dutch entity to the foreign company.

You must, however, have an office space in the Netherlands where the branch is permanently established. This will then be the second establishment of the foreign company.

Taxation issues

When you start up a business in the Netherlands you are, of course, liable for Dutch taxes. The taxes you will most likely have to pay include:

  • Corporate income tax
  • Payroll tax
  • Value-added tax

After registering with the Chamber of Commerce, your details will automatically be forwarded to the tax office. The tax authorities will then assess the taxes you will be required to file.

If you register the business as a partnership or sole tradership, you will have to deal with personal income tax. The consequences for income tax will be discussed in the third in this series of articles.

Corporate income tax

If you run a profit in the Netherlands, you must pay corporate income tax over the profits.

The rates (in 2013) for corporate income tax are as follows:

  • 20 per cent for profits up to 200.000 euros
  • 25 per cent for profits over 200.000 euros

The tax year is the same as the calendar year: from January 1 to December 31. Corporate income tax returns must be filed with the tax office before July 1 of the following year. For example, the 2013 tax return must be filed before July 1, 2014.

Payroll tax

If your company employs staff in the Netherlands, then Dutch payroll tax will be withheld from their wages. This must then be paid to the tax office through a Dutch payroll system. If the salary is determined under foreign tax rules, then the salary will be recalculated to Dutch standards.

The payroll tax return must be submitted electronically each month. If the tax return is not submitted on time or the tax is not paid, fines and penalties will be imposed.

Value-added tax

After you have established your company in the Netherlands, you may have to calculate VAT on your income and expenditure. The reporting periods are monthly, quarterly and yearly.

The tax office will determine which reporting period you have. The tax return must be submitted electronically, unless the tax office sends you a tax return form.

The VAT return must be filed and paid before the end of the month following the month which the VAT return covers (e.g. the July VAT return must be filed and paid before August 31). If payment is late or the return is not filed on time, fines and penalties will be imposed by the tax office.

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