#income tax companies
Last modified: 23 December 2015
Tax payable by
Corporation or corporate income tax is levied on companies established in the Netherlands (resident taxpayers) and on certain companies not established in the Netherlands, which receive income from the Netherlands (non-resident taxpayer). In this context, the term “company” includes companies with a capital consisting of share, co-operatives, mutual insurance and credit companies, foundations and other legal persons incorporated under civil law, when they administer an enterprise, funds for common account, and most publicly-controlled industrial and commercial undertakings.
Sole proprietorships, freelancers and partnerships do not fall under the corporate income tax. Their profit is taxed with personal income tax.
Basis of assessment
Profits in the widest sense, with a number of additions or deductions. The determination of the taxable profits corresponds largely with the determination of profits taxable under personal income tax, including the deductibility of losses from other years.
Legal persons whose activities are of a social or charitable nature or otherwise in the public interest are exempted from corporation tax. Exempted categories of profit are those corresponding to the relevant exemptions under personal income tax. Furthermore the participation exemption applies to all dividends, gains and losses related to the holding of at least 5% of the shares in a subsidiary. This rule, preventing economic double taxation, is in general equally applicable to dividend deriving from domestic and foreign subsidiaries. The loss related to the winding-up of a subsidiary is, under certain conditions, deductible by the parent company. The deductibility of interest paid on non-functional loans and loans related to a reshuffle of participations within the group is restricted to certain circumstances. Another amendment permits companies to depreciate loss-making participations of 25% or more during the first five years after acquisition.
Investment: the relevant rules for the corporation tax are largely corresponding to those for the Personal Income Tax Law.
- Fiscal unity: a company which holds 100% of the shares in a Dutch subsidiary may request to be qualified as a “fiscal unity”. However, certain conditions apply. It is possible for a fiscal unity to be consisted of more than two companies. The subsidiaries are considered to be absorbed by the parent. As a result, negative results of companies belonging to the unity can be compensated horizontally with positive results of the others. Interest paid to a group company in respect of the acquisition of shares in Dutch operating companies cannot be set off against the profit of these operating companies.
- Regime for investment funds: provided that all current income is distributed to shareholders and a number of other conditions are met, an investment company or fund is entitled to add capital gains on securities and real property to a reinvestment reserve and to a rate of nil per cent on the (remaining) profit.
Annual assessment by the tax department on the basis of the taxpayer’s declaration. If no such declaration is submitted, the amount due is assessed directly by the tax department.
2016: 20% over the first € 200,000, 25% over the surplus
2015: 20% over the first € 200,000, 25% over the surplus
2014: 20% over the first € 200,000, 25% over the surplus
2013: 20% over the first € 200,000, 25% over the surplus
2012: 20% over the first € 200,000, 25% over the surplus
2011: 20% over the first € 200,000, 25% over the surplus
2010: 20% over the first € 200,000, 25.5% over the surplus
2009: 20% over the first € 200,000, 25.5% over the surplus
2008: 20% over the first € 275,000, 25.5% over the surplus
2007: 20% over the first € 25,000, 23.5% over the next € 35,000, 25.5% over the surplus
2006: 25.5% over the first € 22,689, 29.6% over the surplus
2005: 27% over the first € 22,689, 31% over the surplus
Reason why the rates have been reduced is of course the current situation within the EU. New member states often have lower rates but also Ireland is offering low rates. For an impression of these rates up to 2005 see the table with rates for all the member states.
Dividends are currently taxed at a rate of 15%. If a tax treaty is applicable a lower percentage may be agreed.
New tax treaty with the US
Since February 2006 there is a new tax treaty with the US indicating that profit sent from and to the USA by mother- and daughter companies can be done tax free.