‘We can’t make you like it, but we can make it easier’
The Netherlands has a modern tax system, which aims on the one hand to create as few obstacles as possible for business and industry, and on the other hand to prevent companies from having to pay double taxation.
Here is a quick overview of the Dutch tax advantages:
- A highly competitive corporate tax rate of 25% (20% up to € 200,000)
- A wide tax treaty network which included more than 90 tax treaties for the avoidance of double taxation and a reduction in foreign (and Dutch) businesses withholding taxes
- Prior certainty from an Advance Tax Ruling Practice
- 30% tax ruling for expats for a period of up to 96 months – seen as a tax free reimbursement for the extra costs involved in living abroad
- A change of VAT rules on 1 January 2015 means that VAT is now payable in the customer’s country of residence, rather than the supplier’s
Additional tax benefits for R&D facilities include:
- Research & development wage tax reduction, WBSO.
WBSO is a contribution to the wage costs of employees carrying out R&D and other R&D costs and expenses. The tax benefit consists of a reduction in wage tax and social security contributions. The deduction is 32% of the total R&D costs and expenses (first € 350,000) and 16% (above € 350,000). The 32% is increased to 40% for start-ups.
- Research & development costs and expenses deduction: RDA.
RDA is a tax allowance for investments in R&D. Whereas the WBSO supports the wage component, the RDA is concerned with other cost components, and a percentage of your investments may be deducted from the corporate income tax.
- Research & development profits taxable in innovation box.
The innovation box results in an effective tax rate of just 5% on R&D income from self-developed patented and/or from unpatented intangible assets that qualify for the WBSO.