This document provides an overview of common taxes businesses in the Netherlands have to pay, including: (1) Value Added Tax (VAT), also known as turnover tax, which is added to most goods and services; (2) Corporate Income Tax, which applies to the taxable profits of limited liability companies; (3) Payroll Tax, which employers must withhold from employee salaries and consists of wage tax and social security contributions; (4) Dividend Tax, which companies must pay when distributing profits to shareholders; and (5) Municipal and Provincial Taxes, which vary by location but include taxes like waste disposal tax. The guide recommends businesses contact an accountant for assistance with filing taxes.
This document provides an overview of common taxes businesses in the Netherlands have to pay, including: (1) Value Added Tax (VAT), also known as turnover tax, which is added to most goods and services; (2) Corporate Income Tax, which applies to the taxable profits of limited liability companies; (3) Payroll Tax, which employers must withhold from employee salaries and consists of wage tax and social security contributions; (4) Dividend Tax, which companies must pay when distributing profits to shareholders; and (5) Municipal and Provincial Taxes, which vary by location but include taxes like waste disposal tax. The guide recommends businesses contact an accountant for assistance with filing taxes.
This document provides an overview of common taxes businesses in the Netherlands have to pay, including: (1) Value Added Tax (VAT), also known as turnover tax, which is added to most goods and services; (2) Corporate Income Tax, which applies to the taxable profits of limited liability companies; (3) Payroll Tax, which employers must withhold from employee salaries and consists of wage tax and social security contributions; (4) Dividend Tax, which companies must pay when distributing profits to shareholders; and (5) Municipal and Provincial Taxes, which vary by location but include taxes like waste disposal tax. The guide recommends businesses contact an accountant for assistance with filing taxes.
This document provides an overview of common taxes businesses in the Netherlands have to pay, including: (1) Value Added Tax (VAT), also known as turnover tax, which is added to most goods and services; (2) Corporate Income Tax, which applies to the taxable profits of limited liability companies; (3) Payroll Tax, which employers must withhold from employee salaries and consists of wage tax and social security contributions; (4) Dividend Tax, which companies must pay when distributing profits to shareholders; and (5) Municipal and Provincial Taxes, which vary by location but include taxes like waste disposal tax. The guide recommends businesses contact an accountant for assistance with filing taxes.
LAWLESS GUIDE SERIES COMMON TAXES IN THE NETHERLANDS FOR BUSINESSES Table of Contents 03 The Lawless Guide Series
04 Why read this guide?
05 Value Added Tax
(VAT/BTW/omzetbelasting)
06 Corporate Income Tax
(CIT/inkomstenbelasting)
07 Payroll Tax (loonheffing)
08 Dividend Tax (dividendbelasting)
09 Municipal and Provincial
Taxes
10 Conclusion
02 The Lawless Guide Series The Lawless Guide Series is an initiative designed to help our subscription clients familiarise themselves with various areas of Dutch law and business practices.
Designed to be compact, concise and user-friendly, the
Lawless guides provide clients with a bank of resources on topics relevant to their day-to-day- business.
03 Why read this guide?
Everyone living and working in the Netherlands has to pay
taxes. But what types of taxes do business deal with? And are you responsible for your employees’ taxes as well? These questions will be explored in today’s guide.
Which tax applies to you depends on the classification of your
income. The most common taxes to look out for as a business owner in the Netherlands include: (1) VAT; (2) (corporate) income tax; (3) Payroll tax; (4) Dividend tax and; (5) Municipal and Provincial taxes. Each will be briefly discussed in turn.
04 Value Added Tax VAT/BTW/ omzetbelasting The most common VAT rate is 21%, although other special categories of 9% or 0% can be applicable in certain circumstances, depending on the good or Also known as Turnover tax service in question and the or BTW, VAT is added to type of entity offering such most goods and services that products (for instance a businesses sell in the foundation or an Netherlands. All businesses, association). excluding some foundations and associations, must add BTW to the price of their goods and services.
05 Corporate Income Tax CIT/inkomstenbelasting
Corporate Income Tax applies to the companies taxable
corporate income, which are the profits of the business (revenue minus costs). CIT applies primarily to legal entities with limited liability companies, such as private and public limited liability companies, and therefore excludes entities such as sole proprietorships. As for foundations and associations, they may be subject to this tax under certain circumstances.
The corporate income tax rate depends on the taxable
amount . If the taxable amount is € 395,000 or less, the corporate income tax rate is 15%. If the taxable amount is more than € 395,000, the corporate income tax rate is € 59,250 plus 25,8% for the taxable amount exceeding € 395,000.
06 Payroll Tax loonheffing
If you have employees in the Netherlands, then your business
needs to pay Payroll tax. Payroll tax consists of wage tax and other contributions that are withheld from an employee’s salary by the employer, which saves the employee from having to pay them later as income tax.
More specifically, payroll tax is made up of your employee’s
wage tax, in addition to social security contributions such as pensions, unemployment allowances and healthcare insurance premiums. The combination of these factors make up the payroll tax, which the employer is tasked with withholding and paying monthly per employee.
07 Dividend Tax If your company receives a dividendbelasting dividend on the shares it owns in another company it As a private or public limited can deduct the dividend tax company you may decide to from the balance of its distribute profits to your corporation tax payable. shareholders. This usually Once dividend is received as takes the form of a dividend. a company, it may be offset If so, you'll also have to pay against the corporate Dutch dividend tax to the income tax. Dutch Tax and Customs Administration. In paying out Dividend to its shareholders, the company must withhold the applicable dividend tax rate and file the return within one month from the dividend being issues. The general rate of dividend tax is 15%.
08 Municipal and Provincial Taxes
Depending on your location and type of business, you
will be faced with different local taxes, for instance tap water tax, waste disposal tax, and advertising tax, to name but a few. Keep an eye out for such taxes, as they are typically payable annually. Contact your municipality, provincial or water board to find out which taxes apply to your business.
09 Conclusion
These are five most common types of taxes that business
owners will encounter in the Netherlands. Keep an eye for our future guides, where we will dive deeper into each category of tax, including when and how to file them. It is however often difficult to stay up to date with all the changes and deadlines for these various taxes. This is where a reliable accountant is a must have to take care of your company’s tax needs. If you need assistance finding such an accountant, or have any other questions, make sure you reach out to the team at Lawless and we will help you in making the right decision for your business.
