Corporate Income Tax (VPB)
Corporate Income Tax (vennootschapsbelasting or VPB) is levied on the worldwide profits of companies resident in the Netherlands.
The Tax Rates (2024):
- **19%** on the first **€200,000** of taxable profits.
- **25.8%** on taxable profits exceeding **€200,000**.
This two-bracket system is particularly beneficial for startups and SMEs, as it provides a lower tax rate on initial profits.
Value Added Tax (BTW)
Value Added Tax (Belasting over de Toegevoegde Waarde, or BTW) is a consumption tax.
The BTW Rates:
- 21% (Standard Rate): Applies to most goods and services.
- 9% (Reduced Rate): Applies to certain goods and services like food products, books, and medicines.
- 0% (Zero Rate): Applies to international transactions, such as exports of goods and certain cross-border services. This allows you to reclaim BTW paid on related expenses.
Dividend Withholding Tax
The Netherlands levies a 15% dividend withholding tax on profit distributions to shareholders. However, this can often be reduced or eliminated.
A full exemption from dividend withholding tax may apply if the parent company is located in the EU/EEA or a country that has a tax treaty with the Netherlands. This makes the Dutch B.V. an excellent holding company structure.
Final Thoughts
The Dutch tax system is competitive and offers several advantages, especially for internationally operating businesses and startups. Understanding the interaction between corporate tax, BTW, and dividend tax is key to structuring your operations efficiently.