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Dutch BV Tax Structure
In today’s international fiscal environment, the Dutch holding (BV) company regime is still the most preferred holding regime in the world – mainly because of its tax efficiency (mostly 0% tax). Other factors that add to its popularity are the flexibility of Dutch corporate, tax law and the lower cost of incorporation and maintenance.
The favorable tax regime of a Dutch BV company for holding activities and the easy-to-follow legal and financial infrastructure attract a vast number of foreign investors in the Netherlands. The Dutch BV taxation structure offers a tremendous reduction of the tax at source. Additionally, the Dutch holding company may create a strictly legal possibility to defer taxation in your home country. We have advised a wide range of clients on the Dutch BV tax structure and have helped to set up and manage their tax compliance every year.
Benefits Of Dutch BV Taxation
The Netherlands offers beneficial Double Tax Treaty network comprised of extensive treaties with over 100 jurisdictions – offering a reduction in withholding rates of taxation on dividends, royalties, and interest paid to holding companies. These treaties also usually exempt the capital gains from Dutch BV tax structure.
The tax structure of the Netherlands also offers complete exemption from taxation for income from eligible foreign subsidiaries through the participation exemption regime – offering no taxation in the country of qualifying dividends and capital gains.
Dutch holding entities also enjoy tax benefits such as IP arrangements and financing with no withholding tax on services, interest, and royalty payments.
The companies also avail the innovation box regime under which they gain profits from eligible intangible assets, taxed at a rate of 5 percent. Additionally, Dutch BV entities are usually subject to 25 percent corporate income taxation on their profits.
Save large on your tax by doing business in the Netherlands. Contact us to get help for the Dutch BV taxation.