Tax benefits of a Dutch BV
The Netherlands has an attractive business climate for foreign enterprises. That’s thanks in no small part to the various tax benefits available. Certainly if you set up a Dutch private limited company (BV).
We’ve set out the main advantages of a BV for you:
1. Withholding taxes
Dutch withholding taxes on interest, dividends and royalties paid to companies in the Netherlands are low.
A Dutch BV means you can access the world’s largest tax treaty network (96 jurisdictions). This protects against expropriation and provides protection for investors.
3. EU directives
Dutch BVs are covered by the EU directives on reducing withholding taxes on payments between related companies.
A full tax exemption applies to income from foreign subsidiaries, providing the Dutch holding company has a stake of at least 5% and you meet at least one of the following conditions:
1 The subsidiary’s consolidated shareholders’ equity must not consist for 50% or more of low-taxed, free passive investments.
2. The purpose of investing in the subsidiary is to generate a higher return than could be expected from standard asset management.
5. Innovative activities
Profits you generate from innovative activities for which an R&D statement has been issued are taxed under the Innovation Box regime. That means an effective rate of 9% in 2022.
6. Tax free restructuring
Under certain conditions, corporate restructurings are also possible on a tax free basis. But make sure that you first obtain full details of the applicable conditions.
Businesses wanting to set up in the EU can receive support.
8. Fiscal Unity
Under certain conditions, a Dutch BV can form a fiscal unity with other companies so that they are taxed as a single taxpayer.