Netherlands: Business Environment
Exports of goods, intra-Community supplies of goods, supplies of solar panels for installation on or near residential properties, and supplies to ships and aircraft used for international transportation are zero-rated.
For tax purposes, goodwill amortization is limited to 10% of the purchase price per year. Additionally, the tax depreciation of other fixed assets, such as inventory and equipment, is limited to 20% of the purchase price or production costs per year.
Up to 75% of environmentally friendly investment costs can be deducted from taxable profit.
Starting from January 1, 2022, an indefinite loss carryforward applies. However, losses (both carryforward and carryback) can be fully deducted only up to EUR 1 million of taxable profit. If the profit in a year exceeds EUR 1 million, losses are deductible only up to 50% of the taxable profit exceeding EUR 1 million. For the carryforward of losses, those incurred in financial years beginning on or after January 1, 2013, will be indefinite.
Dutch companies can generally deduct royalties, management service fees, and most other charges paid to foreign affiliates, as long as the amounts do not exceed what would be paid to an unrelated entity (i.e., the arm's-length principle). Dutch companies are required to provide transfer pricing documentation that details the calculation of the transfer price and its comparability with third-party prices.
Insurance tax at a rate of 21% is levied on insurance premiums, excluding life, accident, medical, invalidity, disability, unemployment and transport insurance, which are exempt.
Various environmental taxes are levied, including a coal tax, an energy tax on the supply of electricity and natural gas, a tap water tax, a waste tax on the disposal of waste and a motor vehicle tax. Moreover, a national CO₂ levy applies to industrial production and waste incineration.
Companies annually bringing 50,000 or more kilograms of packing material on the market must pay a ‘waste management contribution’ (rates vary according to various parameters).
In the Netherlands, there is a fee known as "cijns" that is levied based on the turnover associated with oil and gas production and exploration. Starting from 2023 until 2024, an elevated cijns rate of 65% is applicable to turnover specifically derived from the sale of natural gas at a price exceeding EUR 0.5 per cubic meter.
A unilateral air passenger tax is imposed by airport operators. The rate is EUR 29.05 (2024) for each passenger departing from a Dutch airport (an exemption applies to transfer passengers and children under the age of two).
Municipalities levy an additional annual real estate tax at varying rates, which is deductible for corporate tax purposes.
The total aggregate rate for social security contributions is 27.65%, calculated on the first EUR 38,098 of each employee’s gross salary (2024).
Netherlands | OECD | United States | Germany | |
Number of Payments of Taxes per Year | 9.0 | 10.1 | 10.6 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 119.0 | 163.6 | 175.0 | 218.0 |
Total Share of Taxes (% of Profit) | 41.2 | 41.6 | 36.6 | 48.8 |
Source: Doing Business, Latest available data.
Box 1 - Home ownership and Employment Income | Tax Rates (2024) |
EUR 0 - 38,098 | 9.32% |
EUR 38,098 – 75,518 | 36.97% |
EUR 75,518 and over | 49.5% |
Box 2 - Enterprise Income | |
EUR 0 - 67,000 | 24.5% |
EUR 67,000 and over | 33% |
Box 3 - Savings and Investment Income | 36% |
Under the work-related cost scheme, the employer may reimburse expenses tax-free, up to 3% for the first EUR 400,000 of the total fiscal wages and 1.18% for the remaining amount of the taxable wage bill. In 2024, the work-related costs budget for the first EUR 400,000 is set at 1.92%. If this budget is exceeded, the employer must pay a wage tax in the form of a final levy at 80% on the excess amount.
Personal deductions include alimonies, charitable contributions, education expenses (replaced with the STAP-budget, a contribution of a maximum of EUR 1,000/year to take a course or programme to increase one's employability), medical and disability expenses, life annuity premiums, mortgage interest payments related to the primary residence.
Qualifying non-resident taxpayers who are non-resident individuals can avail themselves of specific deductions and tax benefits that are typically applicable to resident taxpayers. To qualify for this scheme, non-resident taxpayers must meet certain (adjusted) conditions. The key requirements include having 90% or more of their income subject to wage and income tax in the Netherlands and residing in a European Union (EU) member state, Bonaire, Iceland, Liechtenstein, Norway, Saba, Sint Eustatius, or Switzerland. A general provision is also included for cases where a non-resident taxpayer's income is less than 90% subject to Dutch tax, but they are entitled to personal allowances in the Netherlands based on European law. Additionally, non-resident taxpayers must provide a declaration of income from the tax authorities in their country of residence.
If certain conditions are met, a foreign employee working in the Netherlands may be eligible for the '30% ruling,' allowing a tax-free reimbursement of 30% of their income from active employment to cover extra-territorial costs. If this ruling is applied, actual extra-territorial costs cannot be reimbursed tax-free in addition to the 30% reimbursement, unless the actual costs exceed the 30% amount, in which case the higher costs can be reimbursed tax-free. As of 2024, the 30% tax-free reimbursement is reduced to 20% after 20 months and to 10% after the next 20 months. To qualify, the foreign employee must have specific expertise that is not available or is scarce in the Dutch labor market. For 2024, the general gross salary norm is EUR 46,107 (EUR 65,867 including the tax-free reimbursement of 30%). A lower gross salary norm of EUR 35,048 (EUR 50,068 including the tax-free reimbursement of 30%) applies to individuals with a Master's degree (MSc) under 30 years old. No salary norm applies to scientific personnel and researchers at educational institutions and subsidized research facilities. Additionally, the employee must have lived outside a 150-kilometer radius of the Dutch border for more than two-thirds of a 24-month period before starting Dutch employment to qualify for the expat ruling.
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Latest Update: November 2024